Question

CHAPTER 3 1. Q. Marx and Engels claimed that they advocated scientific socialism in contrast to utopian socialism. What was the basis of their criticism of the latter? Was it justified? 2. Q. According to the Marxian labor theory of value, what is the value of a piece of capital equipment? 3. Q. Is there any relationship between the debate over orthodox Marxism and revisionism and the current debate over gradualism versus sudden “shock therapy” in the transition from command socialism to market capitalism? 5. Q. How did Hayek respond to Lange’s defense of market socialism?

Answer 1

Answer 2 :- According to Marxian labor theory of value, the economic value of goods and services produced in the economy is determined by the amount of necessary labor required to produce it pr we can say the required labor hours worked by the workforce.
For example- if two goods are produced simultaneously, then the commodity utilising more labor hours to produce will be priced higher than the other commodity regardless of the value of the inputs used.

From the capitalists point of view, labor theory seems to be irrelevant because it does not take into consideration the values of necessary inputs required to initiate the production process.

According to marx, capital is the amount of wealth used in making profits and is entered in the accounts. It is the money required to buy somethinga and then sell it to realise the profits.