Orlando Padilla. Mrs. Miller. English 1A . Flawed Economic

1562 WordsMay 3, 20177 Pages
Orlando Padilla Mrs. Miller English 1A Flawed Economic System How is it possible for people to be able to hit the lotto for millions and yet there is people starving in their homes ? How can there be so much misery in midst of such abundance ? Inequality is the source of enormous frustration among groups who no longer believe that they can achieve a reasonable facsmile of consumption as those of the upper classes. The social problems that result from such feelings represent some of the most fundamental contradictions that persist under advanced capitalism. That is why it should be of no surprise, then, that understanding the principle cause of these issues is an important topic for discussion. Today, government programs come and go and…show more content…
Peet says “Mechanization raises the surplus exploitable by the owners of the means of production by increasing the productivity of labor, and thus increases the capital available for reinvestment in more machinery, facilities, and raw materials” (566). This means that as economic development takes place, the relative demand for labor falls because mechanization provides and faster and more efficient means of production. Production costs become more and more the costs of depreciating machinery and less and less the costs of hiring labor as machines are increasingly used to increase capital. As mechanization proceeds, unemployment increases and a labor reserve army is created. Under capitalism, economic development does not proceed smoothly. There are sudden bursts of expansion and even old declining industries bloom during economic booms. Peet says “ In such a situation the economy needs a quick transfusion of labor; a labor reserve is necessary, to be pulled into the labor force when needed, and discharged just as rapidly when demand slackens or mechanization proceeds” (567). In other words, the labor reserve prevents surplus value from being diverted from capital accumulation to labor; thus, serving its role under capitalism. The Marxist argument, therefore, is that “inequality is not a ‘temporary aberation’ nor poverty a ‘surprising paradox’ in advanced capitalist societies: instead inequality and poverty are vital to the normal operation of

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