Marxian Economics

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Definition of 'Marxian Economics'

Marxian economics is a school of economic thought that was developed by Karl Marx in the 19th century. It is based on the idea that the economy is a system of class struggle, in which the working class is exploited by the capitalist class. Marxian economics argues that the capitalist system is inherently unstable and will eventually collapse, giving way to a socialist or communist society.

Marxian economics is based on a number of key concepts, including:

* **The labor theory of value:** This theory states that the value of a commodity is determined by the amount of labor that is required to produce it.
* **Surplus value:** This is the difference between the value of a worker's labor and the wages that they are paid. Marx argued that this surplus value is the source of profit for capitalists.
* **The class struggle:** Marx argued that the history of all hitherto existing society is the history of class struggles. He identified two main classes in capitalist society: the working class and the capitalist class. The working class produces the goods and services that society needs, while the capitalist class owns the means of production and extracts surplus value from the workers.
* **The inevitable collapse of capitalism:** Marx argued that capitalism is inherently unstable and will eventually collapse. He believed that this would happen because of the contradictions inherent in the system, such as the tendency for the rate of profit to fall.

Marxian economics has had a significant influence on economic thought and has been used to justify a variety of political movements, including communism, socialism, and social democracy. However, it has also been criticized by many economists, who argue that it is too simplistic and does not take into account the complexity of the real world.

Despite these criticisms, Marxian economics remains an important school of economic thought and continues to be studied by economists and scholars around the world.

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