Marx Mill And Schumpeter Analysis

The appeal of a socialist state for Marx, Mill, and Schumpeter is a better society not only for the wealthy, but everyone in the society. They believe that through socialism humankind can evolve and focus on things other than money and wealth, such as social and human welfare. However, each of these economists held a unique path as to why capitalism would fail, and so it is important to identify these distinctions. To begin, let us examine Marx and his belief on why capitalism would inevitable fail.
Marx idea can be focused on the concept of capitalist exploitation of the working class. In Marx opinion, the capitalist system of government is broken down into two separate classes, the bourgeoisie or the capitalist who own the means of production, …show more content…
Mill believes capitalism leads to the creation of a wealthy class and a poor class like Marx. This difference also brings out the worst in mankind, and creates a dog eat dog world. Mill then explains that it is this divide that will end capitalism, “The industrial economy which divides society absolutely into two portions… is neither fit for, nor capable of infinite duration.” He believes that it will be a desire of all to have an equal start; and let hard work and ability determine how you live, not which family you are born into. In conclusion, he believes that socialism will bring about a steady state that allows for us to improve on a human level and give everyone an equal chance at …show more content…
Theory of business cycle is a complex idea of why there are points of expansion followed by contraction in a state’s economy. Due to this complexity, economists postulate different reasons as to why these cycles are occurring and how best to fix them. First, looking at Keynes, he believes business cycles occurred due to changes in aggregate effective demand, which is now called aggregate expenditures. Keynes believes the main contributor to this change in aggregative demand is changes in investments. From here Keynes explains that the reason there are changes in investment is because of changes in expected profit, or as Heliborne calls it marginal efficiency of capital. An example of an event that changes the expected profit of an investment would be the fed increasing the interest rates. By doing so it makes investments riskier because now you must pay the initial amount borrowed, and high interest. Keynes final contribution to the theory of business cycle is his multiplier effect, which he uses to show the extent to which an individual’s investment effects the level of income, and thus the level of employment. This idea can be connected to an individual’s marginal propensity to consume or MPC. Keynes explains in his book, A Treatise of Money, that as a societies MPC decreases there will be a decrease in investment and thus output, which inevitable leads to unemployment. Upon seeing this unemployment, a change occurs in the society to save more money, which only