Economics and Ideology: The Example of Neoclassical Vulgar Economics
Goods and services are privately owned by individuals who seek to maximize their satisfaction by consuming goods and services
Humans try to maximize their material self-interest by utilizing their owned resources and available technology.
Self-interest-maximizing individuals are the ultimate determining cause of economic activities and developments.
Transactions occur in the market where individual private property owners meet voluntarily. They are free to sell and buy. Markets are the best institutions for economic organization. In markets, every transaction is mutually beneficial
The values and prices of goods is determined with reference to markets where demand and supply (graphs) intersect. It is usually framed as a constrained-maximization problem, that is, individuals try to maximize pleasure under societal constraints. Individual wants and productive capabilities are the essentials that generate demand, supply.
The supply of labor depends on our free will and our preference between real income and leisure, and the total labor hours demanded and the money wage rate are fixed in the labor market. The wage pays labor what it deserves according to its marginal productivity. This means that high incomes in a market economy depend on individual’s preferences for work instead of leisure and on the relatively high objective marginal productivity of that labor. So the rich are rich for good reasons and the poor are poor for good reasons.
Interest on capital depends on capital’s contribution to output, exactly like the real reward paid to labor depends on labor’s contribution to output. This rules out the possibility that any owner may receive less or more than his resources added to produce the output. Everybody is free to become a profit receiver, it only depend on his ability and willingness to work and to forfeit consumption instead to saving.
Maximum profit is consistent with and even necessary to achieve maximal happiness for individualized consumers.
Economics and Ideology: The Example of Neoclassical Vulgar EconomicsGoods and services are privately owned by individuals who seek to maximize their satisfaction by consuming goods and servicesHumans try to maximize their material self-interest by utilizing their owned resources and available technology.Self-interest-maximizing individuals are the ultimate determining cause of economic activities and developments.Transactions occur in the market where individual private property owners meet voluntarily. They are free to sell and buy. Markets are the best institutions for economic organization. In markets, every transaction is mutually beneficialThe values and prices of goods is determined with reference to markets where demand and supply (graphs) intersect. It is usually framed as a constrained-maximization problem, that is, individuals try to maximize pleasure under societal constraints. Individual wants and productive capabilities are the essentials that generate demand, supply.The supply of labor depends on our free will and our preference between real income and leisure, and the total labor hours demanded and the money wage rate are fixed in the labor market. The wage pays labor what it deserves according to its marginal productivity. This means that high incomes in a market economy depend on individual’s preferences for work instead of leisure and on the relatively high objective marginal productivity of that labor. So the rich are rich for good reasons and the poor are poor for good reasons.Interest on capital depends on capital’s contribution to output, exactly like the real reward paid to labor depends on labor’s contribution to output. This rules out the possibility that any owner may receive less or more than his resources added to produce the output. Everybody is free to become a profit receiver, it only depend on his ability and willingness to work and to forfeit consumption instead to saving.Maximum profit is consistent with and even necessary to achieve maximal happiness for individualized consumers.
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