Economic Theories……………………………………………………………………4

Impact Analysis………………………………………………………………………..6

Graphs……………………………………………………………………………..........8

Current Issue Analysis………………………………………………………………10

Researcher Conclusion……………………………………………………………..12

Works Cited……………………………………………………………………………13

“The history of society is the history of struggles between social classes (Rader, M. 145).” This quote from Karl Max is an introduction to his philosophy of government and economics. Karl Marx was German political philosopher and revolutionist, and one of the most influential people in the history of the world. His theories on economics and government have had immense effects on the world. Revolutions, wars, and other struggles have been fought over his theories and concepts.

Here is an example of how the labor theory of value works: A worker in a factory is given $30 worth of material, and after working 3 hours producing a good, and using $10 worth of fuel to run a machine, he creates a product which is sold for $100. According the Marx, the labor and only the labor of the worker increased the value of the natural materials to $100. The worker is thus justly entitled to a $60 payment, or $20 per hour. If the worker is employed by a factory owner who pays him only $15 per hour, according to Marx the $5 per hour the factory owner receives is a rip-off. The factory owner has done nothing to earn the money and the $5 per hour he receives is "surplus value", representing exploitation of the worker. Even the tools which the factory owner provided were, according to Marx, necessarily produced by other workers. According to the labor theory of value, all profits are the rightful earnings of the workers, and when they are kept from the workers by capitalists, workers are simply being robbed. On the basis of this theory, Marx called for the elimination of profits, for workers to seize factories and for the overthrow of the "tyranny" of capitalism (Parekh, B. 389). His call to action has been studied in many countries throughout the world.

1. Cohen, G.A. Karl Marx’s Theory of History. Princeton University Press, Princeton. © 1978

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