30-Second Economics

“Planning and market forces are not the essential difference between socialism and capitalism. A planned economy is not the definition of socialism, because there is planning under capitalism; the market economy happens under socialism, too. Planning and market forces are both ways of controlling economic activity.”
TENG HSIAO-P’ING

he “Austrians” are the strongest opponents of government intervention and are considered the fathers of right-wing libertarianism. But their insistence on the superiority of absolute laissez-faire seems far-fetched. It seems too much to argue that a society will only function properly if no collective decisions are taken.

The laborer’s use value is the ability to produce commodities, and in return the laborer is provided with a fair exchange value, or wage, which meets his basic costs of living. Yet when the laborer’s use value is combined with the machines owned by the employer, the commodities produced are worth more than the laborer’s exchange value; in this way a surplus is generated, which the employer takes as profit—this, Marx argued, is “exploitation.” Such profit then provides the means by which capitalism can grow and expand, powered by the continual expansion of exploitation.

Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.’

Many economists, myself included, believe that our insights into how the world works have implications for how the world should work in general. As a result, the scientific theories of economics blur into political theories of the good society.

laissez-faire An economic approach that advocates minimum government intervention (from the French, meaning “let it be”).

Keynes believed that the market needed to be tempered by government intervention.

Keynes believed that the market needed to be tempered by government intervention

Keynes believed that the market needed to be tempered by government intervention