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20.4: Review and Practice
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- There is a gap between what workers receive and the value of what workers produce in a market capitalist system. Why? Does this constitute exploitation? Does it create the kinds of crises Marx anticipated? Why or why not?
- What is meant by the labor theory of value? What are the shortcomings of the theory?
- What would you say is the theory of value offered in this book? How does it differ from the labor theory of value?
- In what ways does reliance on the labor theory of value create a problem for the allocation of natural resources?
- What do you think would be the advantages of labor-managed firms of the kind that operated in the former Yugoslavia? The disadvantages?
- Suppose you were the manager of a Soviet enterprise under the old command system. You have been given a quota and the promise of a big bonus if your firm meets it. How might your production choices differ from those of the management of a profit-maximizing firm in a market capitalist economy?
- What are some government-operated enterprises in the United States? Do you see any parallels between the problems command economies faced with the production of goods and services and problems in the United States with state-run enterprises?
- A Chinese firm operating as a state-owned enterprise had an incentive to produce the efficient level of output, even though some of its output was claimed by the state at state-determined prices. Why is that the case?
- Given that market capitalist systems generate much higher standards of living than do command socialist systems, why do you think many Russian government officials have opposed the adoption of a market system?
- How does widespread criminal activity sap economic growth?