International Political Economy Midterm

9c) What constitutes surplus labor in the household? What are at least two ways that household production of surplus labor can be organized?

- Surplus labor is defined as the labor that housewives perform that go beyond what their own consumption entails, such as producing meals, cleaning rooms, and repairing clothes. These tasks are subsumed labor in that families would appropriate and consume the labor embodied in these surplus products. -Household production of surplus labor can be organized by gender, as women are typically those who perform surplus labor in the household while men are appropriators of surplus labor. -Household prod. of SL can also be organized by distinguishing between fundamental and subsumed class processes. In the feudal FCP taking place in households, women are expected to deliver household surplus labor embodied in goods and services to her husband due to moral and religious standards. Meanwhile, in the feudal subsumed class process, husbands would distribute portion of their household feudal surplus product to ensure their status as feudal appropriators.

5c) In Sections 4.3 and 4.4, Wolff and Resnick elaborate the Marxian concept of class. What do Resnick and Wolff mean by a "class process": define the concept and explain the two main aspects of class processes - fundamental and subsumed. What different types of fundamental class process do they identify?

-A class process is a process where the laborers that produce society's goods and services produce more than the portion that they've received for reproduction, resulting in a surplus. -A fundamental class process is a process where direct laborers perform surplus labor in addition to necessary labor that results in the goods and services they consume. -A subsumed class process is the distribution of the surplus itself by its appropriators. -4 forms of fundamental class processes outside the modern capitalist form: communist form where direct laborers collectively distribute the surplus produced, the ancient form where direct laborers individually distribute surplus produced to those performing nonclass processes, the slave form, and the feudal form where the lord distributes the surplus of the work performed by serfs in a feudal society

5d) Choose a non-capitalist fundamental class process, provide a contemporary example and explain how it works. How is it different from the capitalist fundamental class process?

-A contemporary instance of the ancient form is an individual who creates computer software programs, which he would use for his personal computer, then sell surplus of the software to interested consumers. -This process differs form the capitalist fundamental class process in that a capitalist fundamental class process, the direct laborer has no control over the distribution of his surplus labor, as that's the decision of the owner that he does paid labor for.

5a) In sections 4.1 and 4.2 Wolff and Resnick discuss basic elements of Marx's methodology. What is a "process"? Illustrate the concept of "overdetermination" by trying to identify one example each of an economic, political, cultural and natural process that occurs regularly in our classroom.

-A process is something that when economic, involves the production of goods and services, along with their distribution among producers and consumers. Example- buying coffee before class -When noneconomic, a process can be natural, cultural, or political. A natural process involves the transformation of physical properties of matter, such as the formation of snow outside our class window. -A cultural process is something involved in the cultivation and dissemination of meaning, such as writing a paper for this class, as our beliefs affect how we interpret the reading. -A political process is something involving the control of individual and group behavior within society, which in our classroom would be administering certain rules all students must abide to such as academic honesty. -Marxian theory emphasizes overdetermination, which indicates that every aspect of society is always both a cause and an effect. Thus, in Marxian theory, overdetermination is the interaction between economic processes and cultural, political, and natural non-economic processes in society.

3a) What is a "use-value" according to Marx in Chapter 1? What is a commodity? How is the concept of use-value related to the concept of the commodity? Carefully distinguish the two terms.

-A use value is the usefulness of an object and provides for the commercial knowledge of the object. -A use-value is defined as an object's physical properties. Upon doing so, we're dealing with definite qualities of the object. -A commodity is an external object that satisfies human needs through the commodity's qualities. -A use-value is related to the concept of the commodity, as a use-value can be seen as a property of a commodity, hence why it would contribute to the commercial knowledge of the commodity.

7b) Explain the role each plays in the class struggle within productive enterprises and provide a contemporary example of each.

-Absolute SV plays a role in class struggle in that it enabled fradulent factory workers to require workers to come into work slightly earlier or leave slightly later than their avg working day of 10 hours. In doing so, along with cutting times for breaks and meals, owners avoided the suspicion of factory inspectors while extending the length of the wokring day. While these changes weren't significant on a day to day basis, they had the worker being equivalent to working nearly 13 months in the year. Thus, the manipulation of the working day by fraudulent owners for absolute SV highlights the class struggles occurring between the bourgeoise and working class. -A contemporary example of such a struggle is that often for retail jobs, although workers get a break time, they are often minimized with only 15-30 minutes for an 8 our workday, whereas workers from office jobs get breaks that last an hour. This shortening of breaks enables owners of retail stores to reap the absolute surplus value possible from these min wage workers. -Although more subtle, relative surplus value also plays a role in class struggle in that in order to increase the productivity of labor, the nature of the labor itself is intensified while the working day is kept the same. Workers don't receive any form of compensation or pay raise for their increased productivity, showing how the surplus labor workers perform is only of benefit to the capitalist. Thus, as workers aren't reaping any of the benefits of their productivity growth, there's an evident class struggle between the capitalist and the laborer. -A contemp. example of this struggle is improving the organization in a workplace or improving machinery in a factory, or by assigning more rigid deadlines to workers (ex- requiring a worker to finish a task in 4 hours that would take 6) in order to improve productivity, but w no benefit to the workers themselves.

7a) Carefully explain the concepts of absolute surplus value and relative surplus value using specific references to Marx's discussion in Chapters 10 and 12.

-Absolute surplus value is a form of surplus value produced when the working day is extended. Here, the worker must perform not only the hours required for necessary labor, but additional hours that count as surplus labor. -Relative surplus value is a form of surplus value produced when the length of the working day isn't affected, but the amount of socially necessary labor time for the production of a commodity is shortened. This amount is shortened through an increase in the productivity of labor. As a result, through this increase in productivity and the subsequent dec. in necessary labor, surplus value is created w/o extending the working day.

2b)How would you characterize Marx's view of work in Fischer's Chapters 2 and 3?

-As a developed form of labor, which begins with the utilization of a tool found in nature to give it a more efficient form, meaning that work is something that's inherently creative. -However, Marx attests that work performed by laborers has lost this creative quality when work was undertaken under coercion. -Work is also something that's divided, since no individual/community in place and time can perform what mankind as a whole is called to work on. This quality leads to a division of labor thats both within the work process and a social division between owner and laborers.

4a) Compare and contrast C-M-C and M-C-M' the two exchange systems Marx introduces in Chapter 4, taking care to explain what they represent, how they are similar, and how they differ. Provide an example of an exchange that corresponds to each of the two systems.

-C-M-C is an exchange system where commodities are transferred into money, and the money's spent for the repurchase of commodities. An example of a C-M-C exchange is if I sold a bushel of corn for $30, then used $30 to purchase clothes. -M-C-M is an exchange system where money is spent to purchase commodities, which are sold for money. Here, money is essentially exchanged for more money. An example of a M-C-M exchange is if I purchased 1,000 pounds of cotton for $50, then resold the cotton for $60, resulting in a profit of $10. -A similarity between the 2 exchange systems is that for both systems, a commodity and money is confronting each other in the interaction between a buyer and a seller. -However, a key difference between the 2 systems is that for C-M-C, the whole process is being regulated by money, whereas for M-C-M, the whole process is inversely regulated by a commodity. -In C-M-C, money is ultimately withdrawn for the purchase of a commodity with a use-value, which is the final goal of the exchange system. -Meanwhile, for M-C-M, since money's released with the final intention of getting it back, money is simply being advanced in this system. The final goal of this system would hence be exchange-value.

6e) How does competition affect productivity, competition and the accumulation of capital. In the authors' view, why is it not possible to solve these problems through the appropriate economic policy?

-Competition affects productivity, as all capitalists are required to sell their firm's products at a lower market value in order to retain sales. In doing so, in order to maintain profits, firms must increase their productivity in order to reduce the cost of production. This is bc competition provides incentives for each enterprise to improve its laborers efficiency and threatens every enterprise that doesn't do so as fast as its competitors. -Competition affects the accumulation of capital, the process of using part of surplus value to increase productivity by purchasing extra tools and raw materials, along with hiring more laborers, which will in turn increase surplus value. This is bc the accumulation of capital will in turn increase productivity for firms, which will set off competitive pressures on firms that can't afford as much accumulation of capital. -It's not possible to solve these problems through appropriate economic policies, as from an overdeterminist perspective where social problems related to competition are a result of infinite social processes, a singular policy can't result such problems. This is bc since a singular policy, or even a set of policies, will only focus on a tiny subset of overdeterminants, it will not sufficiently solve the entire problem with competition that stems from capitalism.

1b) Why might understanding these differences and the historical development of these theories matter?

-Doing so enables us to see how understanding based on one theory vs. another leads individuals, families, communities, gov'ts into completely different directions -Gaining a better understanding of differences between theories enable us to undermine our intrinsic tendencies to demonize the theory that's not popular.

6a) How do the three components of a commodity's value - C, V and S -relate to embodied labor (EL) and living labor (LL)?

-Embodied labor (EL) is represented by the time it took for other workers' past labor to produce tools, equipment, and raw materials needed to produce a good. This form of labor is transferred into the final value of the finished good, but remains constant. Since this value remains constant, C (constant capital), which is a part of a good's total value, is derived from how much embodied labor is needed. -Embodied labor occurs prior to living labor (LL), which is the hours of labor added by the direct laborer towards the finished good. Living labor consists of both paid labor and unpaid labor. The value of paid labor comes from the worker's labor power, his or her capacity to work. This is bc paid labor is determined by what the buyer of labor power pays the laborer in order for the laborer to keep selling his labor power. Here, the paid labor portion of living labor is variable capital (V), which is a part of a good's total value that is subject to change. -Unpaid labor is excess labor performed by the laborer that he is not being paid for. Surplus value (S) arises from this unpaid labor, as the wage the laborer receives for his work is less than the value added by this laborer.

Drawing on both Fischer & Marx, what does Marx mean by estranged (or alienated) labor and what are four ways this estrangement occurs in a capitalist society?

-Estranged labor: marx is describing the disconnection of a worker to his labor, meaning that the more objects a worker produces, the fewer objects a worker receiveshimself. -4 ways of estrangement: A worker's estranged from his labor in that the final product of labor lacks creative quality and is simply an alien object for the benefit of a private ownership. A worker's estranged from the activity of labor, as it is something that drains the worker of his physical and mental energy, and is hence directed against him and is not truly belonging to him. A worker's alienated from his species and subsequently himself, as the work performed is reduced to a form of empty wage earning and lacks creative quality/individuality. A worker is finally alienated from other men, as the dehumanizing nature of labor leads to a social division of labor that makes one man the material owner and others workers merely performing the laborious acts of production w/o any say in the work done.

2a) What is Marx's "dream of the whole (hu)man" according to Fischer in Chapter 1 and how is Marx's view different from the classical liberal view of the individual as a rational, self-interested individual in neoclassical (mainstream) economics?

-Fisher describes Mar'x dream as one where the humanity of each individual is realized, which requires a transition from the alienation of humans from each other and themselves to a recognition for the humanity of each individual, along with the relationship between men. -In doing so, men must no longer be dehumanized through private ownership and its capitalist methods of production. -Society must not only satisfy the basic animalistic needs of humans (food ad shelter), but also recognize uniquely human needs such as cultural development -This is different from the classical liberal view in that during the political revolution in America and France guaranteeing men the right to liberty, but this liberty only extended to individual rights where men still acted in competition w/each other. Thus, such a man would have purely private interests and preoccupations, while a man under Marx's dream would have interests collaborative to that of his peers.

9d) Contrast these two different household class processes and explain how they might affect relationships between household members differently? Provide an example from your experience or from media to illustrate your response.

-Fundamental and subsumed household class processes differ in that since household production of surplus labor is organized by gender, women act as deliverers of surplus labor in the FCP, while women act as receivers of surplus labor from their husbands, who serve as appropriators of SL as the head of the household. Thus, women play the role of the subsumed class in the household. -These class processes affect relationships between household members diff. when either husbands or wives try to move from their respective class position to a position of a wage-earning productive laborer in the enterprise. Since husbands hold a position as appropriators of feudal surplus value and hold a duty to run and protect the household, they would be more likely to hold multiple class positions at households and enterprises. -Meanwhile, as wives have moral/religious obligations to hold household class positions as serfs, they face more complications w/adding a 2nd class position as productive laborers in an enterprise, such as time constraints and religious conflicts. -Example: In South Korea, although there's been more progress for working women, women have historically been confined to the home with the moral obligation to serve to their husbands and family. As a result, my grandma and some of my aunts have served as stay at home mothers their whole life w/o ever holding a class position within the enterprise.

7c) How does globalization affect workers ability to organize effectively according to Quan?

-Globalization affects the ability of workers to effectively organize initially in that it increased the level of competition of capitalists, which in turn puts workers into deeper poverty as it causes workers to lose their job and makes finding a job more difficult. -As a result, those who attempt to form unions find that traditional ways of organizing are no longer effective. This is bc since labor markets are now globalized, unions no longer make up a large portion of the workforce, hence weakening their ability to bargain for more benefits and higher wages. Additionally, if workers choose to strike, they face the possibility that the employer will move the work to another country, facing them at risk for losing their jobs.

8e) How is this categorization of class based on sources of income different than thinking of class in terms of overall level of income? Explain.

-It's different in that in neoclassical and Keynesian theories, class is categorized in terms of one's quantitative income, such as upper, middle, and lower class, which is only representative of quantitative income and does not take into account how this income is acquired. -Meanwhile, Marx's categorization of class takes into account the process as to how the income is generated (fundamental, subsumed, or nonclass). In doing so, his categorization highlights how class process and income influence one another.

1d) Why is an understanding of theoretical differences important?

-Keeping in mind of how these theories differ from each other, we can evaluate them and form our own view about the economic world. Knowing the history will help us understand the social circumstances under which different theories emerge and flourish.

1a) How do Wolff and Resnick characterize the differences between neoclassical, Keynesian, and Marxian theories in the opening 3 sections of the chapter (1-1 to 1-3)?

-Key differences between the 3 theories is recognized by the difference in each theory's understanding of the cause, solution, and nature of business cycles. -Neoclassical and Keynsian theories favor capitalism while marxism favors socialism and communism, which were seen as providing less wealth and individual freedom for Neo and Key

4f) In what sense is labor free according to Marx. Why does he claim that labor is also not free? What is the importance of these aspects of freedom and unfreedom for understanding class struggle in his view? Do you agree with his characterization of labor in capitalism? Explain why or why not.

-Labor is free in that workers have the freedom of choice to sell their labor-power to any capitalist interested in purchasing their labor, while the freedom to get rid of the worker when there's no more profit to be made. -However, labor is not free in that workers can't produce commodities independently of capital, since the capacity of labor is nothing unless it's sold.Thus, as laborers are confined to the capitalist mode of production, labor is not free. -These aspects of freedom and unfreedom is crucial for understanding class struggle, as the laborers, which form the working class, are powerless without the capitalists, who form the bourgeoise. This imbalance of power reflects the class struggles associated w/the working class. This is bc the worker enables the capitalist to consume his use-value before receiving payment for it, and gives credit to the capitalist for all of his work. -I agree w his characterization of labor, because members of the working class in factories worldwide are required to abide by the regulations of factory owners prior to receiving compensation, and receive no individual credit for doing their work.

4d) In Chapter 6, what is labor-power and how is it distinct from labor? How does Marx's distinction between labor and labor-power help him explain the source of surplus-value?

-Labor-power is the combination of the mental and physical capabilities a human sets in motion when producing any kind of use-value. -Labor power is distinct from labor in that labor is the physical act of working, whereas labor power is the capacity to do work. -Labor power can be treated as a commodity when the laborer places it as the disposal of the buyer, while labor itself isn't a commodity. This distinction helps Marx explain the source of surplus-value in that labor only has value when it has surplus-value, or contributes to the expansion of value, -Although labor itself doesn't produce a surplus value, labor-power results in the production of a newfound use-value, and it is within the realization of this value that we find the origin of surplus value.

8b) Identify one other subsumed class process and explain how it functions.

-Landowners also function as a subsumed class process in that capitalists want to access to land in order to appropriate surplus value. -In turn, capitalists would pay rent, or distribute a share of the appropriated surplus to landowners. Thus, since landowners are receiving appropriated surplus from industrial capitalists, they function as a subsumed class process.

4b) How does Marx define "capital" and "surplus-value"?

-Marx defines capital as the accumulation of money, which in its first form is the ultimate product of commodity circulation. -Marx defines surplus value as the excess over the original value made in an M-C-M exchange system. For instance, if cotton was purchased for $50 and resold for $60, $10 is the surplus value.

9a) How do Wolff and Resnick use revenues and subsumed class payments to define "profit"?

-Revenues & subs. class payments are used to define profit in that profit is the resulting value when costs of commodity production is subtracted from the revenue made from the sale of commodities. -Here, revenue is defined as W, or the sum of constant capital, variable capital, and surplus value. Meanwhile, the costs of commodity production in this context can be defined as not only the costs of constant and variable capital as defined in modern US corporations, but also rents, interest payments, etc. which make up subsumed payments. These payments of appropriated surplus value are distributed to specific subsumed classes such as landlords and moneylenders.

9b) Explain why rising profit can exist with falling surplus value and/or falling rates of worker efficiency? What implication might this insight have for the analysis of competition in competitive markets?

-Rising profit can exist with falling surplus value, as since profits are simply one part of surplus value, falling profit is a result of either reduced surplus appropriation in the FCP or increased subsumed class payments to the surplus. Thus, even if surplus value decreases, if subsumed class payments from this surplus decreases as well, increase in profit is still possible. -Likewise, rising profit may still exist w/falling efficiency, as although fewer commodity outputs could be produced per unit of total labor output in the case of a corporation's relocation, if there were lower subsumed class payments due to the relocation, the reduction in this value can offset the reduction in efficiency that leads to a lower surplus value.

8c) Briefly summarize your family's class position based upon its sources of income.

-Since my father works in management, and is the primary moneymaker of my family, my family would have a subsumed class position. This is because my father was hired by an industrial capitalist and receives a share of appropriated surplus value produced by laborers for his efforts.

3b) Under what circumstances is something a use-value but not a commodity? Provide an example with reference to Marx's writing. Is a commodity always a use-value? Explain why or why not.

-Something is a use-value but not a commodity when its utility to humankind is not mediated through labor. (Examples would be air and unplanted forests- no labor in creation of them, but they're still useful.) -A commodity is always a use-value, since a use-value would be tied to a commodity's physical properties.

8a) Explain how money lenders (finance), management and merchants (retail trade) function as subsumed class processes. Be sure to identify the specific conditions of existence each provides for the capitalist fundamental class process (FCP) and any contradictions that might result.

-Subsumed class processes are those that involve the distributors and recipients of portions of a surplus that's already been appropriated. -Money lenders are subsumed class processes in that they grant loans to industrial capitalists to enhance their competitive survival. Such a loan contributes to the fundamental class process in that it can be used to hire more workers or instill more advanced technology to give a firm a competitive advantage. However, what's done w the loan is irrelevant to the money lender, who's lending money for the interest he'll receive from the loan. Here, this interest value is the surplus value that the capitalist would appropriate to the money lender. Here, as a recipient of a distributed share of surplus value, the money lender occupies a subsumed class position. -Management services are a retail trade subsumed class process in that management is used to ensure that purchased labor power is fully devoted to producing output. Here, managers contribute to the capitalist FCP in that managers play a role in ensuring that laborers produce as much surplus value as possible. A portion of this appropriated surplus value is distributed by the industrial capitalist to managers as a means for them to continue their job. However, the salary managers receive may exceed the surplus value anticipated of them. -Merchants serve both commodity exchange and a retail trade subsumed class process in that when a merchant purchases commodities from a 2nd industrial capitalist, the capitalist will offer the merchant a fee for timely commodity exchange. In this scenario, the fee is a portion of appropriated surplus value that merchants receive, hence why they occupy subsumed class positions. Merchants contribute to the capitalist FCP in that merchants accumulate capital through buying and selling, which is contradictory from that of other capitalists who expand capital through their exploitation in production.

4c) In Chapter 5, explain why surplus-value cannot arise from the circulation (buying and selling) of commodities. Why is this claim important for Marx's argument?

-Surplus value can't arise from the circulation of commodities, as when commodities are being exchanged in its pure form, they're being exchanged as equivalents, so the value of the commodity doesn't increase. -Since the commodities would be of equal exchange value, no one party would benefit more from commodity circulation from the other, or gain a surplus value. -Even if a commodity was sold at above its value or purchased at below its value, since all sellers or buyers would sell or purchase the good at the given price, there's no surplus value. -This claim is important to marx's argument that circulation creates no value, showing that trade alone doesn't lead to more value. -Additionally, the knowledge that selling the commodity at a higher price/buying it at a lower price won't result in any surplus value helps us see that no value can be created from the circulation of commodities, regardless of its initial value.

1c) What characteristics of theories are important to identify in order to compare theories and what are some of the key differences between the three approaches to economics?

-The difference of economic theories reflects people's different beliefs. It occurs naturally because people come from different social environments and have distinctive values. Neoclassical economists believe in humanism, which means that the individual person is put in the most important place and advise against intervention. Keynesian economists believe in structuralism, and argue that certain intervention in the economy is necessary because the process of correcting economic issues by the market on its own is too slow to function. Marxism believes that the rooted issue is the classed society of capitalism. In order to reach equality, people need to establish communism, in which surplus of labor is not taken away by the minorities.

3c) How is the "exchange-value" of a commodity determined? Explain and provide an example. How is exchange value different from use-value?

-The exchange-value of a commodity is determined by the proportion in which use values of one kind exchange for use values of a diff kind. For instance, given that corn and iron are 2 commodities, a given quantity of corn is equated to a given quantity of iron. Both commodities would thus be equal to a 3rd commodity, which the exchange values of the 2 commodities must be reducible to. -Exchange value differs from use-value in that use value is something that is definite and qualitative, while the exchange value is simply the form of the appearance the use value takes, or a quantitative representation of a commodity's value.

6c) What are the four different types of capitalists? Why is only one category considered "productive"? What distinguishes productive from unproductive laborers?

-The four types of capitalists are those involved in the capitalist fundamental class process, moneylending capitalists, landlord capitalists, and merchant capitalists. -Only those involved in the capitalist fundamental class process are considered productive, as this is the only type of capitalism where the capitalist receives surplus value. This is because for the a borrower-lender relationship, renting out land, and merchant transactions, as no labor is being performed to create commodities, there is no new value being produced. As the surplus value from a land or merchant transaction does not involve the creation of commodities, it cannot measure the self-expansion of capital. Thus, since the capitalists involved in the fundamental class process are the only capitalists who appropriate surplus labor, they are the only ones who are productive. Here, the capitalists in this process are the owners of firms, or upper-class members of society with the upper hand in the system. -Just like the capitalists, laborers can be productive or unproductive. Productive laborers not only sell their labor power to a productive capitalist, but also perform surplus labor that produces surplus value that is of personal benefit to the capitalist. Meanwhile, unproductive laborers sell their labor power to capitalists, but do not perform any surplus labor.

4e) What is the value of labor-power and how is this value regulated or determined in capitalist economies? Why might it change?

-The value of labor power is determined by the labor time necessary for the production, and subsequently the reproduction of a specific commodity. -This value is determined in capitalist economies by means of subsistence necessary for the owner of labor power or the worker to maintain a healthy state. -This value is subject to variation, as the fundamental needs of the worker, such as food, clothing, and shelter depends on the physical conditions of his country, such as the climate and level of civilization. This value also depends on what rights the working class have in a certain region or country.

5b) How are these processes related according to Resnick and Wolff? Explain how we might understand some aspect of our classroom through understanding the tensions among two or more of these processes. Be specific

-These processes are related, as in Marx's concept of overdetermination, economic and non-economic processes influence each other as opposed to society mainly being influenced by economic processes. Since the economy is being determined by natural, cultural, and political aspects of society, the economy will be pushed and pulled in all directions, causing the economy to be in a constant state of tension and change. -An instance of this tension between 2 or more of these processes would be the decision to rent instead of buy textbooks. This decision to save money is an economic process, but holds influence from cultural processes such as ideas in the news about frugality, along with political processes such as the increase of federal taxation.

7d*) What effect do these struggles have on the rate of surplus value - S/(C+V) - in the U.S. and abroad? Use a numerical example and/or diagram to illustrate and explain.

-These struggles affect the rate of surplus value in that as the level of competition increases, which in turn increases the productivity of labor, the rate of relative surplus value will increase. This is bc there's a direct relationship between increased productivity of labor and relative surplus value. -Thus, as the level of competition increases more and more from globalization, firms will feel the need to increase productivity as quickly as possible, which will in turn increase the rate of relative surplus value. This rate will increase esp bc workers are in conditions from globalization where forming unions against working conditions is rendered nearly impossible, making the capitalist keep wages stagnant while failing to shorten the working day. -See diagram in packet (show both abs. and relative surplus value, use arrows)

3d) Why does the utility or usefulness of a commodity not affect the magnitude of its exchange value according to Marx? How does this differ from neoclassical economic theory?

-This is b/c the utility would be measured by the duration of labor time necessary for such a commodity, which in itself doesn't affect the commodity's value, as regardless of the time spent to produce a commodity, the human labor-power exerted wouldn't change. -Thus, what does affect the magnitude of the exchange value of any commodity is the amount of labor socially necessary for the commodity's production. -This is different from neoclassical economic theory in that neoclassical theory insists on objects having specific levels of utility in order to determine the magnitude of its exchange value. -These levels are determined by levels of supply, which is defined by technical endowment, and demand, which is determined by consumer tastes. Thus, the idea of socially necessary labor does not exist in neoclassical econ. theory.

6d*) How can the standard of living of workers rise with a rise in the rate of exploitation? Use an equation or diagram to illustrate your answer.

-This is bc when laborers become used to a higher standard of living, they will require more commodities to continue selling their labor power, and the value of this labor power itself would increase. -However, as production commodity grows more efficient, it will require less hours, meaning that each commodity will have less value, which will in turn lower the value of labor power. -The equation to determine the value of labor power, which shows how the standard of living can rise w/rate of exploitation, is V=e*q, where e is the value of each commodity per unit and q is the total of all the quantities of wage commodities. -When the value of e that falls due to increased exploitation, which would drop the per-unit value of commodities, is more than the value of q due to an increase in the standard of living, the value of labor power will fall despite an increase in living standards for laborers. Thus, workers will experience both increased exploitation and increased wages, as workers would have to produce more due to the drop in labor power. -Numerical example (look at packet): In order to find exploitation rate, it is q/v. q=# of hours in working day# of hours required for apple quantity., v=apple quantity. Through q/v, we see that from 4 apples in 4 hours to 5 apples in 3 hours, both the value of labor and value of each commodity increases, indicating that both exploitation rate (1 to 1.67) and wages increase.

6b) What does the ratio S/(C+V) measure?

The ratio S/(C+V) measures the rate at which capital self-expands, which is determined by the growth accomplished by capital, or the surplus value that attaches itself to a good in its course of production, divided by the constant and variable capital of a good.