Microeconomics
Microeconomics
11th Edition
ISBN: 9781260507140
Author: David C. Colander
Publisher: McGraw Hill Education
Question
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Chapter 3, Problem 3IP

(a)

To determine

Inherent reason in a centrally planned economy that would make innovation difficult.

(b)

To determine

Inherent reason in a centrally planned economy that would foster innovation.

(c)

To determine

Schumpeter’s argument on innovation.

(d)

To determine

Schumpeter’s prediction and modern capitalist economies.

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The YouTube video "Why Capitalism Works" seems to provide a compelling case for why capitalism is beloved by many Americans. Yet from a Marxian perspective, the video fails to address a  flawed aspect of the capitalist enterprise. What does the video intentionally(?) hide and briefly explain why a Marxist would find the capitalist economic model problematic? What basic solution would it offer to enhance the quality of workers' lives?
Marx and Engels ([1848] 1967) argued that market-based capitalism was the most dynamic force in the world. Originating in Western Europe, this economic system was based on capital accumulation, the spread of markets, and the exploitation of labor. This latter idea was based on the notion that labor is the source of all value in the production process, but labor is only recompensed part of that value, in the form of wages; the rest goes to the owner of the capital as profit Under the capitalist mode of production, profit comes from the exploitation of human labor. Under the capitalist mode of production, profit comes from the exploitation of human labor. However, the accumulation of capital and new technology displaces labor. Joseph A. Schumpeter (1939, 1942, 1991) argued that growth was supply driven by the factors of production, with entrepreneurial innovation the most important of these. He believed in a “raw instinct” that drove entrepreneurs. He saw development as being driven by…
can you give me a brief explanation on why this passage is an economic motivator?
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