The paper "The Theory of Capitalist Development by Paul Sweezy" is an excellent example of an assignment on macro and microeconomics. Paul Sweezy stated that Marxian economics is the economics of capitalism and capitalist economics is the economics of socialism. This statement depicts the work of Karl Marx who gave the negative side of capitalism and advocated for a socialist form of society. Marx was a radical economist whose work criticized the existence of capitalism, therefore his economics dealt with capitalism and its negative effects on society. Sweezy stated that economics of capitalism was the economics of socialism, from Karl Marx work this is relevant in that Marx criticizes capitalism and in its place advocates for a socialist form of society.
Marx rejects and gives the negative sides of capitalism and states that socialism will emerge from the ruins of capitalism. Some of the negative sides of capitalism that Marx stated include increased poverty and the exploitation of labor, false consciousness that exists when people live in a capitalist society. Inequalities of wealth that do not exist in a socialist form of society, therefore Paul Sweezy aimed and explaining the economics of Marx.
Capitalism forms of society as Marx stated was not an effective way in which the society was structured, this was because there existed two classes of those who had the wealth and those who didn’ t have the wealth, from this Marx advocated for socialism form of society where there were no inequalities in wealth. His socialism form of society is a society in which we have no individual owner of means of production. The means of production in a socialist form of society are owned by the society, therefore economics of capitalism are the economics of socialism where we criticize capitalism according to Marx and at the same item advocate socialist form of society.
Despite Marx argument, no country has developed using the socialism society a good example is Russia which rejected the form of society. The diamond water paradox: The diamond water paradox states that water has very significant to human beings but it is given very little or no value in the market, to diamonds man has given too much value to it and yet diamonds have very little significance to human beings in terms of survival.
This is what is termed as the diamond water paradox that shows how we give much value to a diamond and yet the diamonds are not that significant to human beings survival. On the hand, we give zero or very little value to water which is very significant to the survival of a human being. The concept of marginal utility can, however, explain this paradox.
The utility is a measure of satisfaction derived from consuming a good, marginal utility, on the other hand, is the additional satisfaction of a good that is derived from consuming one extra unit of a good as the consumption of that good increase indefinitely. As the units of a good increase in consumption then the utility level derived decreases, this is termed as diminishing marginal utility. The diamond water paradox can be explained by the marginal utility concept. It is clear that every good experience diminishing marginal utility. Water, however, is not as a scarce as diamond and as we consume more water we experience diminishing marginal utility.
We experience this until a point where we derive negative utility from the water. For diamond, it is clear that we will still experience diminishing marginal utility but this diminishing utility will not be as great as that for water, the reason being that diamonds are scarce. Therefore the rate of diminishing marginal utility will not be as much as for water which will be higher because water is much scarce than diamond.
Paul Sweezy (1946) the theory of capitalist development, Dobson press, London,
Paul Sweezy (1949) Socialism, McGraw Hill, New York
Ray C (1999) Principles of Economic, Prentice Hall, New York