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Marxist School of Thought
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Marxist School of Thought
The Marxist School is based on the works of Karl Marx (1818-1883). According to
the Marxist labor theory, the value of a given commodity in the market is equivalent to the
socially necessary amount of labor inherent in it. This way of thought was in contrast to
previous classical political thoughts around the role of labor in the economy. Particularly,
David Ricardo, a classical political economist, coined that the value attached to two given
commodities being exchanged in the market would be equivalent to the amount of labor
within the two products or services (McCain, n.d.). This is to say that labor is the source of all
value, and thus, land owners would earn rent mainly due to the labor values of the property as
well as the competitive nature of the market system. Therefore, landowners benefited from a
surplus-value mainly because their land was productive, but Marx viewed the role of labor in
a given commodity’s value quite differently.
According to the Marxist school of thought, a commodity’s value is equivalent to the
socially necessary amount of labor inherent within it. This means that when a worker, such as
a carpenter, takes twice as much time as the standard duration other carpenters normally take
to put up a house, it does not necessarily mean that the value of the house will be double.
Instead, the availability of other carpenters that can put up the same structure in half the time
makes ‘half-the-time’ the socially necessary amount of labor (McCain, n.d.). Therefore, the
time wasted by a contractor that takes longer to build the same house is not included in the
property’s value as such excess or wasted time is not “socially necessary.” This Marxist way
of thought helped contribute to economic understanding of what is good a...
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