Download Fundamentals of economic theory PROLOGUE

Fundamentals of economic theory
PROLOGUE
This work has multiple, 1) purposes the primary idea is to study the passage of
value pricing, which supports the theory of value. The theory of value defined by
the classics, and Adam Smith postulated by the example of the people of
hunters and Beaver, working time as the value of a commodity, then more
formalized by David Ricardo is collected. Marx combines otherwise working
time, depriving it of its specific nature and taking only into account the character
of human time. For the analysis of capitalism creates models simple and
expanded reproduction supported the theory of value, supports his theory that
the population is not a fact, is not given by nature, there is a process of
reproduction material a given economy should ensure that the population
subsists in capitalist economy the ownership of the means of production, land
and other natural resources is in the hands of workers and their families; the
profit motive encourages owners of capital to use it productively and get the
return plus a plus; Given these conditions it is understood that each capitalist
enterprise collects work time, and the sum of all micros capitalist processes as
means of production or produce goods for final consumption; is the total gross
domestic product, and the amount of time spent is what we know as the gross
domestic product, called value added is equal (in closed economy without
savings) to the sum of consumer goods. 2) The linear development of the model
of reproduction, leads to the transfer of value from one branch to the other
conclusion from the model is made via prices implicitly it raises a theory of
inflation 3) In considering human labor as the only source of wealth and be the
workforce capital in itself an economic policy thrifty in physical capital is
deducted; since the downward trend of the profit rate law due to an increasing
use of physical capital relative to variable capital or labor.
modelo.htm
PHILOSOPHICAL BASIS
 The existence of man been discussed by philosophers, Descartes wrote "I think
therefore I am", ensuring the existence of the subject, the existence of the objective
world been questioned, we can ensure the existence of the material world, as its
denial leads to deny the relationship between human beings. Other positions refer to
have doubts about the certainty of empirical knowledge; do not deny the empirical
fact if not the possibility of knowing because of the imperfection of our senses,
passes through indifference and agnosticism or denial of the possibility of certainty,
the perfect question leads to indifference, while agnosticism accepts the positive
fact, the theoretical explanation of the fact must comply with certain formalities, but
does not point to a full explanation of the fact itself impossible. Marx's conception is
called the philosophy of practice, as our senses pick up stimuli from the objective
world, which was, and that permanently changes since everything is moving, but
where these movements are sometimes cyclical as the passage of day night, or slow
allowing us to study processes. Given the need to understand the essence of being,
Marx poses the urgent need to transform in particular stop a fight of man against
man will devour him. Hence it clear that the certainty of empirical fact is the most
likely theories, and taking as true in the realm of probability. The senses inform us
about the reality of the outside world, so we have an awareness that information
processing in the brain by reasoning it reflects the outside world. Not be certain that
data we would totally blind and deaf mute in a hostile world so we would not
survive. The vision shows us an obstacle, if we move forward we will crash against
the obstacle, trial and error, animate beings have members to move instinctively
nourish us, to replenish energy we spend on move, identified by trial and error
obstacles, foods, with experimentation identify elements to avoid cold, fierce and
build shelters to protect us from the action of weather elements, rain, cold, floods.
Today science studied this universe, he attributes certain age already formulated
theories about their formation, the planet earth, a theory of life, a process of
evolution of species to the appearance of homo sapiens, this universe evolves
independently of the action of the subject. On each side there are several theories,
science accepts that shows more empirical evidence. The process is sometimes we
experience about something and gives us a result, how to heal a wound, choose the
time of planting, then come a theory about the human body, or the seasons in the
astronomical theory that will explain why and we can move beyond experiment.
Sometimes we can confuse theory with empirical evidence as the theory of the
human body by the amount of evidence that this theory throws us; but still theory,
the certainty that we have to find certain organs to open the human body, can not be
total.
 The steps required to formulate a theory in this case is to determine empirical
economic evidence, difficult thing in economics already abstract. First make certain
observations, formulate certain hypothesis, experiment, then formulate the theory.
Because of this we argue that the existence is not known limits, develops in space
time, place and space is occupied by things that have certain properties; are unique
therefore are identical to themselves, we can be classified into sets, formed by
elements, where the unitary assembly is formed by a single element.
If we ensure the existence of the material world as the place where our existence, we
can move on to the study of how we live and reproduce materially.
 So when asked if there is a material world, we will say that as we feel there is a
material world and through the way we communicate with. What features does the
objective world to which we feel? The man first had to survive before you ask;
bestowing divine character to what he could to survive. As you learn by reasoning
of the properties of nature, it appropriates this for their own purposes once you
know its laws, it is capable of using the time productively to generate material
goods, and pass collector and hunter producer.
Gives the impression that Marx uses a method, allow me this vision, like an
intergalactic traveler who observes human behavior, or an anthropologist who
studies how lives and breeds a kind, ensuring that there is no condescending
analysis, which revels with our supposed virtues, focusing on how to how does
provisioned, and how to distribute.
 Unlike other living beings man must produce their own material means of existence.
 After a long period where the man had a predatory activity, from agriculture, the man
spent all his life in these activities. Their organization, family and tribes, nations,
were developed around that activity.
 Then primitive societies became civilizations, where state laws, the division of labor
appears. The emergence of non - economic activities as a super structure, it is
because the division of labor will generate a surplus of material goods llaméense
food, clothing, housing; result of increased productivity, called base material or the
material structure on which the other structures sit ..
 Thus civilizations where human thought, art, literature develops arise; As an example
of this is the Greek civilization, Egyptian, Roman. These companies expand into
great empires, stop and fall. Its flowering is directly related to the production of
means of existence. Work organization was based on independent agents as artisans
and peasants and slave labor.
You can incorporate two concepts, advances in knowledge and innovation, inventions,
impacts on increasing production, growing surplus as returns to work, the tools and
the means of production in general, call development of productive forces, the
appropriation of the surplus by a social class causes the class struggle, the overthrow
of one class by another and a new vision of the world
HISTORICAL RATIONALE
To the extent that goods produced by man are traded are transformed into goods, or
goods produced by man in order to exchange to exchange is essential to assess how
much it cost to produce them if the goods are available, supply and act favoring demand
prices of goods costing more time producing them .
Social structures are shaped in the material reality, appropriation of land, creating
classes of producers such as farmers, direct or slaves; sciences are structured in the
priestly caste societies are led by the dominant castes that make up the state, hosts,
judges, Reyes. These taxes paid by owners. The most prosperous companies may
conform better armed armies; this prosperity is determined by two factors are
developed, what are the working conditions and class relations; and secondly as science
can develop and become inventions and technological advances.
To the extent that man is going to depend on nature to depend 1 man himself and from a
positive vision rely on human reason.
Social formations sometimes stagnate in its material base, implies that the process is
exhausted because it can not sustain the superstructure, as happened to slavery in the
Roman Empire; sometimes the development of the material base necessary to replace
political legal superstructure as the reign of Louis XVI and the French Revolution.
Birth, maturation and decline of empires
 Let 's look at the beginnings of Greek society: there was a flowering of agriculture,
trade, and cities, a large peasantry was formed, and craft; needs to expand and
dominate both commercial rich regions of the Persian defend leads them to form
large armies formed with peasants. As farmers are used in wars they are ruined and
must be sold as slaves and lose their land in favor of the landowners who use slave
labor. The slaves were ancient ruined peasants, who were sold as slaves or prisoners
of hostile nations, or just neighbors.
 Slaves to be owned by landlords, they must take charge of their power, forcing forced
labor, slaves therefore do not care tools, and the land is deteriorating. Alexander's
empire is given in this context, form large armies to seek new lands and organized
colonies. So society must arm, clothe and feed an army; this should seek colonies
and slaves, generating taxes and work.
 During the Roman Empire this model of society is in crisis because of slave labor
productivity is lower than the cost of maintenance, becoming a non - economic
activity. As had disappeared farmers with land, the entire cost of the state apparatus
and especially the great armies fell upon the colonies and landowners, so the
Teutonic invasions were not repulsed, due to a dying empire.
 Military, religious and the king and his court or the nobility during the fall of the
Roman Empire the feudal regime dominated by three orders arises. The king gave
titles of nobility to the military, read land with bonded peasants, nobles were these
armies (mesnadas) with his vassals (landowners junior) in exchange nobles were to
be vassals of the king in the wars. During feudalism develop the Burgos or emerging
cities, and an emerging cottage industry is transformed. On the other hand the
national states are getting stronger against the feudal lords who become increasingly
small closed states, coming into conflict with the kings. This fight will be
triumphant national states supported by a commercial bourgeoisie enriched by the
conquests of America in particular. This bourgeoisie keeps large armies, builds up
great treasures of conquest, will invest these funds in industries that develop in the
boroughs; in the cities masses of serfs fleeing the country in search of freedom and
the goods market develops, banking focus.
 Finally they fall kingdoms and cuts the last feudal order in foot displaced by the
republican, before this regime will occur in knowledge and technical agricultural
revolution and the industrial revolution, socially peasant revolutions, creating the
basis for capitalist development . Farmers produce cheap food in large quantities,
industries employ huge masses of workers, who handle machines, throwing the
market and trades all kinds of cheap goods. It is in this context where democratic
ideas, and the universal rights of man are developed and realized in modern
democratic republics, market laws demand freedom, employees do as free if
concerns are not a property nor they are earthbound; however the need to force them
to be used for starvation wages under inhumane conditions during long hours.
 The nations where the capitalist system initially developed, mainly England and
Holland, achieved a great advantage in the economic sphere over other nations, this
was expressed in the formation of large overseas empires, displacing the old
colonial empire emerged Renaissance. These new empires formed a world capitalist
system, based on international division of labor, industrial rich countries against
poor countries which supply raw materials and cheap food, and hegemony in the
context of trade relations. Then comes the takeoff or capitalist development oriented state, United States, France, Germany, Italy begin takeoff then be adding
more nations are characterized by development of state monopoly that will
overcome the first since the British Empire developed a liberal economic policy of
non-interference of the state.
 The entry of these countries to the industrial era breaks the international scheme, and
accelerates an internal capitalist process: the emergence of trust in the industrial area
and sign in banking, or the concentration of capital in few hands, these struggling
after dominate the domestic market for dominance in the global context, the
capitalist states form large armies with increasingly sophisticated weapons, and
using the forced recruitment will incorporate all the people to wars and played by
weapons which failed in the economic field . In the late 19th century a world
imperialist system, the world divided into colonies and spheres of influence arises.
The scenario of the First World War can be an example of this showdown.
The 20th century short: The new role of the state; UN, new paradigms.
 In the seventeen Russian revolution, a revolution comes with aspirations to liberate
humanity from capitalism, it was confined to the Soviet Union, where the state was
the collective owner, and economic policy was run centrally. While this model
collapsed long - term economic planning allowed him to go from being one of the
poorest countries in Europe, to become a power in the short term, allowing him to
successfully face the German Empire, and its millennium Nazi.
 In Germany, a large military industrial complex, strutting to Hitler, this formulates his
theory of the superiority of the Aryan race, and the disappearance of the degenerate
races, like the Jews, the Russians, blacks develops; enslaving the intermediate races,
and a great German nation.
 The end of the Second World War accelerated the collapse of the colonial policy to
the fore the struggle of the fields, although the socialist model aimed at a better
distribution of wealth, it became bureaucratic, and there was little freedom, industry
became obsolete before the great public demand. The capitalist system was able to
be maintained by increasing productivity, generating a wide range of goods of all
kinds, cheap and quality; we can say that increasing productivity generated time, the
energy used to survive is getting smaller, so that more releases more working time
to be used in higher activities such as art, science and culture in general, generating
a lot of services that go displacing classical industrial and commercial activity, this
coupled with income distribution policies, and development of the social state, rises
on the Soviet model; These models were developed along the border with the
socialist camp.
  In pa ountries Europeans were successive revolutions before reaching modern
democratic to Ticos states, including farmers managed to land owned by the
former landowners ñ pray feudal, workers won labor rights, where business
associations they were threatened by the Revolution or n making concessions to
the unions unthinkable in the 19th century, allowing them to lead a decent life
and decent wages, that way the gener society or its own market; which aims to:
atomization or n of productive agents; the state takes care of essential services,
health, education or n, public transport, administration or state n.
 as a corollary we can see that during the process of development of the
productive forces, which generate a growing surplus in parallel is d to the
distribution struggle in the form of the class struggle for the appropriation
or n surplus, the ruling classes manage to establish reg t menes pol í
Ticos which ensure the dominant power, but to the extent that they
become a brake on the development of productive forces, other classes
that accumulate forces and shift of power to the ruling class, come off the
maze is to in DISCUSSING or n, from anarchism, social democracy,
communism, since the imposition or n of class interests means a
coercive state.
  Pa ountries high human development
Outside the ancient powers arise pa ountries n or rdicos with high í
indices of development are characterized by a high participation or n
state, a high level of education, almost 50% of the workforce is
unversitaria .
Early in the century there was a revolution in Denmark or n LLEV power or
matches or progressive where great progress was achieved in the social sphere.
H ow ay operates the Danish economy? : I to Danish economy is a good
example of a í economy that did not suffer or external pressures to make it at
some u n sense; It has a small ñ or arable land, and beginning of the century
there was a revolution or n or land that distributed it to the peasants, and created
or what they call the social state. Broadly speaking , the state is responsible for
the care or n of the essential services é Call the Health, education or n,
transportation, and employment, water and sanitation; with great emphasis on
education or n, where j or VENES after finishing school leave home and go to
live independently in the schools. Work is mandatory, and the productive sector
is supported by pol í tax policies that guide savings into production or
consumption n directly or punishing more the dep site or banking; the main
source of income is wages, and there is a separation of the GESTI or n or n
business and equity.
Coloc to ndose as an observer, you can see a generator state services, which are
charged to workers with rising incomes to productivity, land in the hands of
farmers, the share capital in the hands of a p ú PUBLIC middle- ñ os and small
savers, and banks whose main activity is prestaci or financial services n u p
public. And the wealth of the people is not impaired, but on the contrary good
life is to ndares Concluci or n: there was a high investment in human capital or
n, direct relations between workers and consumers (services, farmers). (This
vision or n is 80).

 Emerging countries, the gap, and dependence
Third World countries, emerging from the old colonial policy, whose nature
reserves were transferred to the empire, were international policies that subordinated
as nations not to take off; since the emergence of powerful countries means new
competitors, which were backed former allies of empires llaméense landlord, or
local oligarchies; Protectionist policies are punished and nationalizations and claims
over seas and territories. You are lagging behind the technological progress, and the
developmentalist capitalist model emerged in the mid-50 is exhausted and its
successor the neoliberal model; the first noting the continued growth of European
capitalism seeks economic growth based on state investment, investment grows,
employment is rising, wages improved, invigorates the domestic market. This policy
collides with the growth of the bureaucratic apparatus of the state, the increase in
fiscal spending, problems of trade balance and foreign currency, deterioration of
natural resources, in short inflation and low productivity. The neoliberal model
poses recreate the economic conditions of 19th century England with some variants;
state judge and gendarme; industrial capitalists price takers, offering financial
capital and labor, their failure is that workers are reluctant to lower their wages and
the capitalist are reluctant to rise; so the initial unemployment caused by decreased
state spending, falling tariff barriers, elimination of all forms of subsidies; and
antiunion policies becomes chronic and progressive and is accompanied by a fall in
productivity
 Currently, the problems emerging countries aspiring to development as they face
occurs in European countries, or economic growth with income distribution are
unemployment, increasing marginalization, corruption at the state level. The
equation to solve is that to create jobs must be investment, the investment should be
made for that there must be supply of capital, labor supply, consumption market for
the product. Economies try to grow into export markets get the rest of the world as it
is common to all countries there is an oversupply of goods must be produced
cheaply and certain quality to capture markets. Threats are leaking internal capital,
the absence of a flow of foreign capital to the country, and in case if it is the absence
of that invest productively, capital supply can be replaced by the state, it must keep
the favorable trade balance, in order to deal with imports, and keep strict control of
foreign currency or currencies to prevent leakage and acquire technology abroad.
Another way to attract capital that attracts profitability, generally after the crisis ,
there is an oversupply of machinery and equipment, which can produce cheap
generating a flow. To that wages do not lose purchasing power must be a supply of
goods basket, the investment must be price taker, to a competitive market, since
monopolies impose their prices.
 In emerging countries in Latin America in particular, these conditions exist only in the
big cities, giving him called a macrocephalic development; a farmer belt around the
cities, in the rest dominate the large landowners, who exploited the monoculture and
livestock in the Rio de la Plata, coffee, and other crops in Brazil. These extensive
holdings are increasingly becoming less profitable, which makes expel workers
from rural to city; leaving an unattractive investment since it does not meet the
condition of labor supply, empty campaign, and a market for their goods; and also
emptied the small towns, the belt is recharged demand exceeds supply, and the land
is exhausted, so it is increasingly expensive to produce food; economic development
is then tied to a growing out; supplemental import goods basket, maintain a high
exchange rate to promote exports, control the spiral of rising prices and wages or
become tax havens, and develop tourism. These policies to be tied to what happens
in the rest of the world have become unstable, every crisis in one place causes run
capital from emerging countries to their countries of origin.
 The Uruguayan experience
The beginnings of Uruguay, were the Spanish colonization, who conquered this area
populated by indigenous tribes who were colonized some, exterminated others; in
principle they were declared land of no avail, so fortifications built for the purpose
of preventing the Lusitanian expansion. The introduction of cattle by Hernandarias
become the eastern band in a huge prairie inhabited by 40 million heads of winning.
 A marginalized population of the Spanish kingdom was developed on the prairie;
Gauchos; England and Holland soon discovered the richness of the Eastern Band
and traded with the gauchos cowhides. The early settlers claimed the land for
themselves and obtained as royal grants that granted the exploitation of vast
territories or hunting for dairy farms; Then stays fattened cattle are raised and
settled; both in Montevideo and consumption for producing dried meat saladeros for
slaves from other colonies. The Spanish merchant marine not entered directly Plata,
did via Lima, Cusco, Buenos Aires. That caused the rich Colonists had an illegal
trade but fluid England Independence for them was free from Spain to trade with
England; Montevideo becomes a port city, Independence as a nation, consolidate the
model agro - exporter, England buying dried meat, hides, tallow, and sells products
for final consumption, the gauchos are transformed into rural laborers, the
production units are enormous stays They bred and fattened cattle so extensively,
taking advantage of natural pastures; the sheep was introduced; and begin
successive waves of immigrants, through policies of colonization by all build on the
south and on the coast of Uruguay, developing agriculture. The fragile democracy
emerged Independence, is displaced by dictatorships seeking to consolidate the
model, the price of cattle increases, expels aggregates fields, the provision of
laborers are minimized, the fields are wired, and thousands of smallholders they are
stripped of their land, unable to wire; this causes the formation of villages called
rats, continuous uprisings ruined peasants, move to "presidentialism" pseudo
democracy after dictatorship that represents the oligarchy agro export; and begins a
democratic period characterized by industrial growth, since the cheapening
conditions of the goods basket, abundant unemployed labor, enriched commercial
bourgeoisie, immigration knowingly trades internally and with the development of
the meat industry were given open European markets meat. Cattle ranchers are not
displaced by farmers, as happened in Europe with the feudal landlords, the use of
natural grasslands cheapens the cost of cattle, very few staff used an extensive
activity; and exploit advances in genetics to improve the races, leaving this activity
a very high profitability in principle or differential rent with the actual cost is the
cost of raising and fatten an animal with artificial meadow or ration. But in the long
term this activity through technological advancement will lower costs, so that
differential rent will fall and disappear, and the yield per hectare of this activity of
about 70 kilos of meat a year makes almost unproductive units. How are you units
occupy about 14 million hectares, and the concentration of land in few hands
worsened, while small units are ruined, generates macrocephalic growth,
depopulation of the countryside, generalized impoverishment of the inner cities, and
growth Montevideo and its agricultural environment, but some development poles.
 While there was demand for food from Europe in essence, a stream of foreign
exchange that is directed to industrial investment is generated, the crisis of 29 and
the recession generates the first crisis of the model, we know the first dictatorship as
repressive response to unemployment and hunger. The model is exhausted, and the
answer is the welfare state, differential dollar to import machinery and raw materials
price subsidy goods basket, to cut the wage income of foreign productive capital,
demand for all types of agricultural goods for European recovery post-war, when
stabilized Europe begins the crisis of the model, during that period the land used in
agriculture were squeezed to the maximum causing great soil erosion and low
productivity, resulting in a rise in agricultural prices, coupled with the policy of
raising the exchange rate to promote export, generating speculation, sell when the
exchange rate rises, buy during the crisis. This is accompanied by the law of wages
councils 43 where the state guides the increase in real wages and legislation
protecting the trade union struggle ..
 Prices follow a cycle, increase investment, increase employment, increasing food
demand, and demand for higher than normal production agricultural products when
prices reach a certain level producers can produce them, as speculators await prices
reach the maximum to put them on offer, this low real wages, begins the struggle for
higher wages, increases are indexed to prices that spiral of prices and wages will
cause crisis by withdrawing market investment. The other form of speculation is to
buy exportable raw materials such as wool, when the exchange rate is low and
export it when the exchange rate is high; called owls, known market prices when the
harvest is plentiful buy at the price of ruin, falls into widespread speculation,
prompting a triggered inflation, other speculative attacks occur when businesses buy
dollars when its price rises purchase goods (Overshooting). This model has high
tariff barriers, prices are fixed in advance, it subsidizes to export industry. This
model we can call the developmentalist model that exhaustion give way after a
repressive period where he tried to impose a freeze on prices and wages and income
distribution down to favor capital inflows, to maximize exports closures meat, bread
with sorghum, monetary expansion led to increased speculation rather than an
investment growth as was his purpose, alternative proposals that generate fear of
radical changes in financial circles and landowners rise, to stop them is allied
financial sectors, industrial monopolies and large landowners with military sectors
impose a model where the purchasing power of wages forcing families to
incorporate more inputs or women's work, prices to supply and demand is released,
attacks are cancelatorio delivers the power of the peso in favor of the US dollar you
can be defined that period as a period of darkness not only socially, the regime can
not be consolidated; While it delayed the growth of alternative responses, this model
can be considered neoliberal trying to create a flow of investment from low wages
and unemployment, but the state apparatus was militarized, and a process of
corruption it was becoming increasingly larger and more expensive, there was a
hollowing out of industry in the form of heavy portfolios which takes over the state,
speculation took new form; speculation on the exchange rate, although wage
inflation fell continued blaring, external debt multiplied by 10, being conditional on
international financial capital, deepening our dependence. The restoration of
democracy finds us with a product almost equal to the gross external debt, we pay
one-tenth as interest; international banking pressed to validate the purchase of heavy
wallets, emptied Industries, emptied banks, a state apparatus with a budget of
oversized defense, at that policy was to assume the debts and modernize the
industrial park without major changes to economic policy, he spoke of continuity,
but with all the agents free to fight their demands making it more transparent, high
exchange rate, wage recovery, triggered inflation, tax haven for financial capital that
while the trade balance is not favorable if it is the balance of payments. It is in 90
where the neoliberal model deepens, tariff barriers are removed, and the exchange
rate anchor is used to contain inflation, which cheapens goods basket, the dollar is
cheaper, it devalues less than inflation; the result was loss of competitiveness of the
domestic industry was due adapt to market rules, becoming price taker fighting a
global market with countries that subsidize their exports, and an export industry
with a low exchange rate, privatization of state enterprises stop. The entrance to
MERCOSUR ratified a growth of trade to neighboring countries, it was to capture
niche markets, possible near-term, but long term there must be areas where it has
comparative advantages. The tequila crisis in Mexico shook Latin American
economies, capital flight generated much unemployment in the region, putting into
question the neo-liberal model.
 The last term, seeing the fate of the anti-inflationary policy of Menem, was
encouraged to take an anti-inflationary plan to dig based on reducing the fiscal
deficit by increasing taxes on salaries and VAT. , And a policy of non-ratification of
monetary inflation, which caused increased unemployment.
concluciones
According to the brief history, we can present to human societies as a complex of
structures, where the base is the way of how they reproduce materially, or family and
the production of goods and services on that structure is built political and social
structure, as individuals among their peers and hierarchical structures where they settle
economically, the formation of the social pyramid with the state as a superstructure that
dictates rules of coexistence relate, and regulates the relationship taking sides in favor of
certain cores, or social classes, other superstructures is the world of culture, the
development of thinking, it can be linked or not productive or political, vertically cut all
structures process as the way to produce expresses the cultural development of the
society and dictates rules or justice, or does your social life. So we define the economic
base and mode of material reproduction of society as families need income to survive,
and economic policies, those that tend to ensure a dignified human beings material
existence. What are the difficulties in achieving the goals of economic policies? : Are
that there should be a collective cooperation, but the empirical evidence shows that
seeking their own advantage economic agents accumulate capital, that is invested to
achieve higher profits, and workers seeking to negotiate a salary with these agents
individually, to be that turned into economic axiom justifying the possession of a huge
amount of capital in a few hands, hidden reality premise: the need for an army of
unemployed who bid for cheap labor on the one hand and on the other push employees
to cooperate for fear of being unemployed. In fact , the human being is a being in
transition, where live his animal past and therefore instinctive, and spiritual
construction, where a backed securities structure is built, humanity has been cultivated
throughout history. This psychology is defined by Froi in the theory of psychoanalysis,
where live, ego and superego.
There is therefore a characteristic tendency inherent human individualism, the passage
collective income distribution forms, can result the progress of the group organization
factor and the collective actions of groups seeking to meet certain goals, there in the
group of individuals seek recognition of the group of person, beyond the factors that
stand, are solidarity, companionship, delivery, courage, some inherited from our animal
past, other man -made . Of course this idea is in conflict with a global tendency of
capitalism to concentrate more and more wealth in few hands, and these groups will
give the struggle for world domination. But there is growing awareness of the
irrationality of trying to make a fortune at all costs to enjoy a world that increasingly
endangered its existence by improper use of the planet's resources.
DEVELOPMENT CONSIDERATIONS
 Classical economics studied the capitalist model emerged in England; England were
given certain conditions; displacement of poor peasants to the city, because the
landlords stopped arrendarles fields to engage in farming, sheep fundamentally;
development of the handicraft industry, and capital flows arising from colonial
exploitation; as the sale of slaves to the Spaniards for gold achieved in Peru for
example; there began the industrial revolution; and later because of the classical
economists, the state is oriented to a judge and gendarme state, not intervening in
the economy, that model the idea of a theoretical model that reproduces the above
conditions of existence arises; because it has certain special properties say some: 1)
Atomization of productive agents; what makes them price-takers. 2) State judge and
gendarme. 3) Information available to agents for decision making. 4) rationality. 5)
Prices governed by the law of supply and demand in the market. Oriented economic
policy economists began to have increasing importance. No part of this work is to
describe the different schools of economic thought, for it can turn to studies of Pablo
Bustelo (contemporary theories of development). More finds that the US economy
is more starkly socially that European, presented these two as models that work, in
generating employment and income for the population, but the recommended
policies from the central countries to emerging countries they assert hegemony
based on. On the other hand a revolution in information technology is making the
increasingly interdependent world; which will cause the planet's existence depends
on whether we think that the world is global, we became increasingly part of that
world and we have to worry as work. From these considerations we can know what
we do not want: 1) concentration of capital in few hands; price monopoly generates,
uses little labor, the decisions of these groups pursuing their own advantage can
destabilize economies.2) Pseudo democracies where the people are not summoned
and must resign themselves to not make decisions. That is the great economic
groups are the decision makers. 3) Strengthening power groups due to the nonjustification of state policies.
 During the dictatorships they tried to impose a model where the army its guardian the
functioning of society being shaped to suppress these internal enemy; As the enemy
are popular manifestations of diversity, the role of this should be reoriented to
territorial defense.
 To approach a model that generates jobs and distribute income must take some
measures as to atomize the market should favor SMEs, as best generate employment
and more competitive; They tend to settle, giving land to farmers. As there is a
shortage of foreign currency, should be targeted export as a long-term balance of
payments.
 With the current level of technology already I could see the enormous productivity
that can be achieved by little that society is organized according to meet targets as
society itself and for itself. Speaking of the failure in 2000 and YCK of computer
systems that did not fit, start earning head of the experts, the need to collectively
confront disasters, can be a school for a new society that must collectively face the
challenges of the new millennium, not only experts, but a comprehensive spectrum
of society as a whole. On the understanding that these new challenges will be
derived from a huge global dependence. It is therefore understood that this
individualistic mentality of economic agents who developed capitalism must be
replaced by the formation of groups with common objectives; which it is included
within these objectives explicit human improvement. This idea is paid 'by the fact
that increasingly is separated management of capital owners. It
means that societies where individualism is cultivated will be punished by the low
responsiveness to the effects of globalization.
 Uruguay's current problems are rooted in history; ranching continues today as rampant
as 100 years ago, while the yield per hectare has already exceeded annual intensive
agricultural production in cereals 10 tons, extensive livestock needs 1.5 hectare per
bovine animal, the bulls delay 4 years in fat, and breeding cows entoran in some
cases every two years, resulting in a production of about 70 kilograms of meat per
year. This activity will be replaced by afforestation that continues to be another
extensive activity, agriculture is centered around Montevideo as a buyer's market, so
that the products of an apartment away from the Capital, are sold in this then be
brought that department to a higher cost. On the other hand placing meat it is more
difficult as the industrialized countries are paying good prices. The price of wool
varies, so does sheep farming is a profitable economic activity alone, to this is added
the near disappearance of the textile industry. Agricultural production on small plots
also faces the problem of low productivity per harvest, non-ability to rotate the
fields, the cost of fertilizers, speculation and monopoly of seeds, and the
nonexistence of prices reference, cause continuous ruin of small producers. This has
an effect on the rest of the activity as small farmers and their families are employed
as farm workers when demand for agricultural labor. The dairy market is almost
monopolized around CONAPROLE to liquidate small distributors of raw milk, it is
now distributed with other multinationals.
 The repopulation of the campaign, a priori condition of further development, should
be designed as a place to live, with centers of education, health, and fencing
supplies, homes have electricity, telephone and drinking water, sanitation;
agricultural banks, experimental stations and technical advice, gathering places and
refrigerators for fruits and vegetables; since it must reverse the trend, you must have
certain attractive settle in the countryside.
Ideas on growth and income distribution
 The economic policy of developed societies, developed in the sense of the level of
human development, maximizes economic means. Suppose two types of income:
income and wages; we assume that these are consumed or saved, businesses are saving
capture and generate income; offering goods on the market, assume that the savings go
into stocks or bonds of companies. Consumption is directed primarily to obtain
livelihoods, essential goods, the supply of essential goods is a relationship between the
labor force and productivity that can reach businesses, time is employed in producing
goods basket, It will depend on a surplus of time to produce other goods will be
generated. These goods are of two types; tangible objects or not where we spend our
leisure time services that generate us more free time, assuming we use a certain amount
of our time on household chores. According to this logic, consumers try to spend on
basket of essential goods, services that generate free time as transportation, electricity,
communications, home appliances, and education that will provide productivity and free
time is consumed or domestic activities llaméese see TV, reading books or make
sybaritism home, or social activities go to restaurants, clubs, cultural activities in
general or increase economic activity or thinking about the world such as religion,
philosophy, it is not intended to be exhaustive. We can then assume that the man in their
economic activity maximizes your productivity to generate time for yourself. Then the
demand depends on the productivity of the offer.
An urban worker and family, working two or offer services that not having them would
be impossible to live. A rural family sometimes has only home, everything else must
produce car, carrying water, firewood for fuel, have their fifth without electricity, all his
time was devoted to tasks either domestic or productive. How much will be willing to
pay for those services ?, Or is that according to the gross product of society, first going
to pay the essential goods to live; services that generate second time; and finally goods
and services of third level. Will be in the linear development model depends balance
that meets two conditions of existence, the salary equal to the essential basic basket plus
a minimum profit rate to be consumed completely. One is the condition of the demand
for essential goods, the other generates an income that demand for consumer goods in
the market, if the capitalists make profits which ensure income for consumption
repeated investment, if they will not withdraw until the bid prices rise to match your
desired income, this income is greater than the workers, so prefer higher quality goods,
this implies that these goods will be more organic composition; for example the
difference between raw milk and cheese, that would determine which goods basket
down, but will be offset by the acquisition of services that save time as transport and
domestic services, which have low or no organic composition.
In the century twenty workers saw change their lives, where they went from a family
that domestic work was divided women and commodity production man, because of the
painful household chores, a family with appliances, cheap fuel, can work both, from
having high productivity, generate income that will require those goods produced, if
that income does not leak, or saved for the most part, they will be used for consumption.
Where is Uruguay and Latin America currently economically?
The economy is proven by different realities in the cities industries that generate jobs in
a solution designed to lower the minimum subsistence wage society, in the sense of
having cheap services they are developed for a deprived society, these services are not
good, they must be the population with resources to private services for higher - level
services, so that families are close to urban centers for these services lacking in the field
or in the villages.
Businesses, Fordism, competition, resistance to new ways of
operating.
 The domestic industry that developed from policies of import substitution was
generating jobs best, private industry was concentrated in a handful of large
companies dominating 80% market share, they imposed their prices to market
forming oligopolies or de facto monopolies; They were organized in a vertical way
influenced by Taylorism, with large administrative structures a directory where the
directors representing major shareholders, a stock of managers; the head of various
departments, with their heads, by the heads of the operative part; Sales, production,
purchasing, distribution, warehousing; management generates a plan to reach certain
goals; where he worked with heads of departments and is presented to the directory
that set the policies and objectives of the plan and approve it or not agree to comply
with the objectives, employment policy is conditioned by two limiting factors
prevent grow or decrease payroll; and the need to list shares on the market; that
makes oversizing the stock of machines and process automation making the
composition of the cost is oversize, production processes must be modernized but in
this case the cost structure conceals a productive inefficiency, the cost of which was
transferred to prices. The fall of tariff barriers, the emergence of the computer
revolution, laid bare these inefficiencies; introducing a new business scenario, the
rapid obsolescence of machines and equipment, when disposing of obsolete
equipment there is the possibility of small businesses to compete obtaining
equipment recycled without large fixed costs, it is forcing companies to be price
takers, each once it becomes more critical productivity of workers in the operative
part, and this depends on the domain of production processes, the ability to adapt to
new technologies, and how the objectives are integrated. This in itself is a change,
before barging staff salary leaving it marginalized the production process, must
comply with the instructions, this fact is added that should restructure the business
organization critically, trying to reduce the managerial staff, and the control part;
Workers on the other hand see the fall of industries that generate good jobs, and
increased micro enterprises that generate lower wages, or become personal business,
or engage in informal work. Unemployment and precarious employment creates
uncertainty when companies negotiate restructurings, in this climate is expected to
try to take advantage imposing conditions of work worse than before. Organized
labor issues discussed today, what extent should be interested in the fate of the
company? ; Should we accept reductions, aimed ?. The new forms of organization at
the global level are based on a business is a human group that integrates specific
objectives with group goals. Workers seek income to live, shareholders seeking an
income, the company must produce distribute and sell certain volume of goods to
enable it to pay wages and generate profits that are shifted to the shares; to integrate
the goals of the group, for the purpose of integration objectives there must be a fluid
dialogue, the action of the workers in groups where workers feel involved and
discuss the partial objectives will boost productivity; This has led to a paradoxical
situation, when union leaders natural leaders who maintain a fluid dialogue and the
group can understand the need to achieve partial objectives, and to be a general
climate of confrontation with management; This attempt to dispute the leadership,
giving rise to leadership in the operative part, fighting a device that will try to self
justify its existence, raising staff problems as problems of indiscipline, the company
does not reach its goals because the staff is undisciplined this as a description of a
transition period; corporate restructuring is followed by a restructuring of the
investment, this is directed to services such as tourism, or to MERCOSUR; State
policies anti-inflationary Lacalle favored an overvalued exchange rate, called
exchange rate anchor, being under the exchange rate for export, then the antiinflation policy Sanguinetti no monetary ratification of inflation and taxes are
increased income which the domestic market weakens, the anchor stops but it marks
the rhythm, the industry is attacked by the export side, and on the side of the
domestic market, it has increased some erratic policies of large companies, as they
can sell or partner but in the current situation should make the "low" this has left the
restructuring of the stalled investment. The future of business is linked to answer
questions arising from anterior¿ analyzes will be companies willing to discuss with
the unions the company management, mainly high-tech ?, to manipulate operating
face, what will make the state contribution to the education, to train future workers,
or upgrade to the current ?, it will affect export prices ?, invigorate the domestic
market with state policies ?, will be oriented to the stock market for the principal
capital is capital human? In the sense that in a competitive business, the main thing
is a human group that fits the continuous changes that generates both the
information revolution as an increasingly global and ever changing market, not
assets that quickly become obsolete . It is important that the actors involved see
fruits of the effort, which generated an overall political dynamism in the market.
 Work:
In the Fordist stage the employee relationship now pointing to an individualistic
relationship, driven by the need for the worker comply with all orders against your
supervisor, so there was a culture of appearing responsibility and unhook of the
hardest tasks, workers see the company as something alien to them, in proportion to
the business autocracy. Some degree of self - management represents a change of
mentality, this change can be accomplished in an authoritarian manner, conditions
famine experienced by the unemployed, low pay, will make the position of wellpaid work, a policy to expel those who have to be valued underperformance, with
awards for good performance, actuates the mechanisms of survival and stick to the
directives of the company; but in the long run it destroys the dignity and self esteem of workers fundamental factors in human groups struggling for goals. For
workers this reality is a challenge; no sense that leaders are made to lift companies,
but if you value the existence of organized human groups, where democracy,
solidarity, economic struggle is practiced and integral human being is formed, is
unavoidable, maintain viable to companies, all this will tell that to manage the
company workers do their homework without supervisors, so they must feel the
company as of them, and their assets; that would recompose business spending,
hiring more workers operating in the sector and reduce the salaries of supervisors;
economies can be overturned to improve wages. This will move on to a slippery
slope where reciprocal reliability is necessary, and it follows that there must be
information, training, and distribution by results. Laterally the union can monitor the
changes result in a better quality of life for workers. It is essential to maintain
independence and can thus exercise control over the process, companies also have
independent control bodies, certain drama in achieving objectives can result in loss
of quality; in the same way a dramatic involvement can affect psychological and
physical, cause accidents, work in unhealthy conditions, forget the family with
irreparable consequences for the individual.
 Taxes
Another factor weighing on the composition of the cost is taxes, it is better to tax the
income of the individual, where he finds a non-taxable, or insolvent minimum
excise duties or VAT that way can be captured more taxes relative with the gain, the
worker of low and medium income will benefit. Why ?, The goods basket,
consumed by the worker will be cheaper, although there will be a tax on your salary,
this will be decreasing with income. Something like: if you earned in the year less
than 50,000 pesos is not taxable, hasta100mil 3% to 4% 500mil so on. As the
cheaper consumer goods companies would benefit. The proposal is to replace
current Progressive Encounter a tax by another gradually. State services must be
tangible, to prevent evasion, for example have a comprehensive health service. Open
jobs, lowers the basket. Currently the cost of a product has from 30 th 40% tax.
WORK: HUMAN TIME CONCENTRATE
As animate beings have as human beings a series of material needs, material needs are
followed needs of all kinds, independent producers created their own livelihoods, their
life time was dedicated to producing livelihoods.
When society divided into social classes, owners of means of production on one side
and free workers but dispossessed on the other, the division of labor reached a degree of
progress where the income of people are in cash, the working class produces livelihoods
necessary for society to be made. Employers buy the workforce by salary. Why do not
we say that buy that particular work ?. It is because the worker dispossessed, looking
livelihoods to survive, for it has its free time during the working day is taken advantage
of this time productively, salary covers a basket essential to live. The worker demand
means to survive by selling their time is measured in sufficient means to live and work,
operating supply and demand for labor, as demand increases basket means. It
may be considered that the products of human labor are the result of time for productive
work, from the point of view of demand, the goods are means of human life and as
human life is measured by time, or life is meaningful function of time, certain goods
assure us life, we can consider the time of consumption, as the inverse productive time,
uptime spend our energies, we must restore in his free time. In this case, it is wage labor
we can determine that if you only spend to replenish their workforce, time to eat and his
family, sleep and shelter, and the crude product is equal to its demand will be generated
idle time which will be distributed within a class, the owners of means of production do
not have to produce their livelihoods and living of profit, interest or rent, the various
ways in which the gain or working time appears surplus.
We can define consume as reverse action of producing, studying the problem of balance
between supply and demand of goods we can focus from the concrete-real, and from
what it should be; it seems natural to think that a society produces to meet certain
requirements to ensure its existence for the production of life, we must eat, sleep
indoors, dress, and is integrating new needs according to certain patterns of priority. In
that case the production is a function of demand, but in capitalism the goal of capitalist
producer is to obtain certain rate of return on invested capital during the Industrial
Revolution in England supply conditions such as being atomizing agents were generated
ie price takers, availability of abundant free labor, technology available, without relative
interference of State produced the 1st industrial revolution, according Hobbsman the
first stage required no scientific or academic techniques, only a certain degree of
expertise, for introducing technological innovations, since it was based on the cotton
industry and coal mining. The theory developed theories of the time of the offer, the socalled classical theory of Lezze fer, Lezze passer, the market as allocator of resources.
According to Say's law according to which any investment creates its own demand;
should not think what were the needs of the population, that problem was the capitalist
able to capture needs generate certain demand for goods and offer a competitive price.
According Hobbsman that period was not a good allocator of resources, throughout the
19th century, English society was defined as poor and illiterate, wealth was only certain
social class. In the 20th century the so - called developed according Keynes Warring
States where the sacred union occurs, create a state can afflict the most damage to their
enemies, periods of pre-war were effective in distributing resources, since production
was accordingly, the first point to consider is that these countries maintain defense
spending such that expect their commercial rivals and politicians may be potential
enemies, which also seek national primacy in terms of living standards, a strong feeling
national makes enemies only occupy the territory where they step. So its economy is in
terms of achieving the sacred union.
Keynes economic theories developed based on demand and thus manages to reverse the
crisis of 29 applying countercyclical policies, based on the theory of the classics, but
defending state intervention through public spending. Following Hobbsman these two
phenomena, the World War and the Revolution, accelerate a process of concessions to
organized labor, leading to the state of post-war welfare state appearing as job creation
and distributor of income, ensuring education, health, and transport and
communications, this paper will try to show that growth tied to the welfare and income
redistribution is based on economic policies where production is based on the needs of
the masses, and that the demand grew to grow idle time workers by reducing working
hours. . (the Soviet Union, with the planned economy is an example of an economy
designed in order to satisfy demands in its early stages, then the cult of work
transformed it into a large factory). For that we try to explain the Keynesian policies,
which were the mostly directed these processes.
Isoquants, or demand curves, which measures the impact of access to certain goods
according to income are used by the Keynesians to study the evolution of prices when
affected income;
Quantity
As total revenues are equivalent to the gross domestic product in a closed society,
intersections are used by economic theory to measure the impact of the fall of income in
price movements and the crude product.
Prices
Income
The basis of the theory is that by increasing revenues increased demand for goods is
generated, and pushes that increasing productivity Abatan prices. Therefore it used the
investment multiplier, increasing public spending. With that increasing per capita
income is achieved grows GDP per capita
This mechanism can generate inflation, overheating model, various phenomena that
appear and are explained by the classical view, or Keynesian views, structuralists, and
others.
Consumer societies generate their own market by transforming the liberated productive
time, idle time, here the term is in contrast idle time dependent work, time consumption.
Time Life = Working Time + Idle time
If the state distributes income, so that is a scale, with more or less symmetrical steps,
there is compulsory labor, a minimum income is received, the majority receives median
income; to higher productivity less time working and more idle time, this is offset by
the increase in the short term of the organic composition of capital, it is the relationship
between constant capital and labor, in the form of means of production such as the time
of production of raw materials machinery, tools, power, establishments, divided by the
hours spent by all workers, higher production volume should be increased more than
proportionally the amount of constant capital which employs the amount of working
time required for that production volume.
The production function used classically associated with the product as a function of the
number of workers, and productivity is associated with the real wage, in this analysis
gross production and employment are the same, as they represent the amount of
working time and potential of the total gross domestic product growth, since it is
assumed that in the short term, with output growth the organic composition of capital,
or diminishing returns to capital increases. The capital in the form of inputs, we'll call
constant capital, does not satisfy human consumption needs, so we use two times as
occurs for consumption must be produced capital in the form of inputs for the next
process, inert capital since her point view satisfy needs, how higher the capital in
proportion to the same gross domestic product will slow growth.
Let x employment, and the organic composition, we can use the model of simple
reproduction of Marx established W2 =  Working Time = product gross or all goods
for final consumption, W1 =  means of production, V = Time needed or the sum of
wage employees in getting livelihood for the material reproduction of workers as a
whole, P = Time surplus, equivalent the mass of profit obtained, which in the model of
simple reproduction is equal to the product to live and enjoy consumed by the
capitalists, equilibrium condition V + P = W2, if labor productivity generates P / V = 1,
2V = W2 , W1 / V = or average organic composition, g is the gross average profit, cost
= W1 + V, g = P / (W1 + V) is reduced to g = 1 / ( or +1), then (1 + g) ( or +1) V =
W, W = W2 + W1, generated gross product in the form of use values, measured in units,
these values represent the livelihoods that will enable repeat the process, van to be
consumed by the income produced as needed basket equal to the wages, and the profit
obtained by capitalists, which contributed capital from it added to the price, which is
cost by (1 + g). the capitalist model develop the productive forces as a function of
capturing profits, assuming now that the model grows, it does so that it does with falling
rate of profit, new products should use more constant capital, the more means of
production to meet food demand should increase investment in the ground with
diminishing returns, it increases capital additions. When the gain is not enough to
increase the product generates a crisis of overproduction, there must be an adjustment of
the capital where the constant capital depreciates and generates the possibilities of
restarting the process of accumulation.
To develop a linear model explain the increase in composition organic due to greater
intermediation between natural material resources used as raw materials, energy or tools
and the final product, leaving constant salary as simplifying assumption. The growth of
production function is given by its derivative, if cost is the independent variable x = (o +
1) V.  x = f (x), 1 + g =  where g is decreasing when production grows.
The INDUSTRIAL CYCLE: limits to capitalist expansion.
In the 19th century cycles related to the falling rate of profit, credit expansion in
industrialized countries, to stop or be slowed this expansion, the payment chain broke,
and banks and owners of money were given sought put it to safety. Or is that a falling
rate of profit, discourages investment, it happens saturation papers endorsed, letters
change, documents deferred payment for the purpose of obtaining liquid means of
payment, increases the interest rate to its maximum , crack, or paralysis of the economy
causes, let us quote some passages to better describe the Capital:
" III) Excess capital overpopulated
With the falling rate of profit increases the minimum required capital in the hands of
the individual capitalist for the productive employment of labor; is the capital required
for exploitation in general so as to work time employee work time is needed for the
production of goods, that is, does not exceed the average labor time socially necessary
to produce them. And at the same time it increases concentration, because beyond
certain limits a large capital with a small rate of profit accumulates faster than a small
capital with a large rate of profit. In turn, this increasing concentration causes in turn, at
a certain level, a new drop in the rate of profit. This makes the bulk of small fragmented
capital see released to the rails adventure: Speculation, credit and stock swindles, crises.
What has been called the plethora of capital always it refers primarily to the plethora of
that capital for which the fall in the rate of profit is not compensated by its mass
• and this is always the case of new branches of capital, or the plethora newly created
these unable itself for autonomous action capital available to large bouquets of business
in the form of credit. This plethora of capital arises from the same circumstances that
produce a relative surplus, so it is a complementary phenomenon of the latter, despite
being located both at opposite poles: Capital vacated by one hand and the working
population unemployed by the other.
Thus, overproduction of capital goods rather than individual-despite the
overproduction of capital always involves the overproduction of goods not mean
anything other than the over accumulation of capital. To understand what this means
cumulation
Detailed test is performed below) must not suppose it absolute. When it would complete
the production of capital? Need more accurately, a production that does not extend to
this, that or a couple "
"But the purpose of capitalist production is capital appreciation, ie appropriating
surplus labor, production of surplus value, profit. Therefore, hardly had increased the
capital in a relationship to the working population in which they could not be extended
or absolute time job that provides the population nor the relative surplus labor time (in
any case, the last enlargement would not be practicable in the event that labor demand
was so intense, that is with a tendency to increase wages); That is, if the accreted
principal only produce the same mass or even a smaller mass of surplus value before
growth, then it would place an absolute overproduction of capital; ie the increased
capital C + AC would not produce higher gain, or even result in a lower profit than
capital C before its increase in AC. In both cases an intense and sudden drop is also
verify the general rate of profit, but this time because of a change in the composition of
capital should not be the development of the productive force, but to an increase in the
monetary value the variable capital (because of wage increase) and the corresponding
decline in the ratio of surplus labor to necessary labor.
In reality, things would be presented in such a way that part of the capital would be
found partially or totally inactive (because in order to valorize first would have to move
from their position to the capital and it is in functions), while the other part, because of
the pressure of unemployed or semi-occupation equity, it would add value to a lower
rate of profit. It would be indifferent to that part of the additional capital take the place
of the ancient capital, passing it to occupy a place in the additional capital. We would
always have one hand the old sum of capital, and on the other the additional amount.
The decline in the profit rate would be accompanied in this case by an absolute decrease
in the mass of profit, since under our assumptions would not be possible to increase the
mass of the employed labor force and increase the rate of surplus value, ie not it could
increase the mass of surplus value. And the mass decreased profits should be calculated
on an increased total capital. But assuming that capital prosiguiese valorising busy with
the old rate of profit, ie the mass of profit will remain constant, it would still calculated
on a total capital increased, and this implies a fall in the rate dc gain "Vol.6 book 3
"The ultimate reason for all real crises always remains the poverty and restricted
consumption of the masses in contrast of capitalist production to develop the productive
forces as though only the absolute consuming power of society beyond its limit." Vol .7
book 3. Karl Marx said that after a period of tension there money supply so low interest
rate to its minimum, a period of stability, appearing knights industry raises the bank rate
but below its average, a period of credit expansion to a later crisis.
from another perspective Keynes analyzes the economy from crisis , unemployment,
stagnation of the economy to analyze in time theoretical models.
in these quotes no accumulated wealth predefined in the Capital, the capital concepts is
expanding value, this value is time accumulated human labor, low material forms of
goods, use values that meet certain utility, and is valued and may generate the owner of
that value surplus value. Establishes a rate of average profit calculated according to the
statistical average the sum of all interest income and income divided by all costs,
supplies and salaries, there are three variables that modify the rate of profit if we start
from equilibrium; the exploitation rate or productivity employment it depends on the
mass of profit, the price of labor, the cost of inputs, this work focuses on the latter, it is
evident that at the beginning of the cycle there is abundant supply of . means of
production, paralyzed during the crisis, abundant unemployed labor, and low interest
rates which encourages investment in profitable papers, actions, documents promise to
pay
the capital recovered through a process: first the agent has money or credit, media
buying production and employs workers producing goods or services, the product is
sold in the market and the agent recovers its capital, generating a gross profit because it
will pay tax and interest deducted from that profit, so interest or interest - bearing
capital is deducted from the industrial surplus is partner to owning the capital employed,
the commercial capital is a specialization within the production cycle of Global Capital,
and follows its margin under the capital contribution to the Capital . Here the industry
term is used generally in the production of goods and services for consumption in the
20th century is more developed services activity properly industrial, but the internal
process is necessary to differentiate when generating value to a product whose end is
consumption, or plays a role within the capitalist process, as the commercial and
banking. You can ask the reader why if there is a downward trend in the rate of profit
empirical evidence shows that long - term capitalist growth is sustained, here acting the
counteracting forces, technical advances make increase productivity, economy in the
use of inputs, so we call profit maximization, noted that one of the assumptions to be
considered as the average rate of profit is higher with decreasing the item costs, another
reason is the fall of wages, expanding foreign trade or foreign investment, and equity.
The second counteracting cause can generate another question Why if the gain is the
average rate capitalists do not spend more capital means labor to turn it insignificant?
The advantage of using labor is that it is resilient to market demand, active in machinery
are risky, within the industrial cycle at start -up capital will be used to maximize profits
as the economy grows, increase wages, so capitalists seek to replace them with
machines generating falling rate of overall gain this is an example of seeking to increase
profit rate in micro entrap the average rate.
Returning to the production function we find ourselves at the beginning of the industrial
cycle, or the end that the crisis is characterized by high unemployment,
here we must determine how the model works expanded reproduction, first analyze how
simple reproduction model works.
This model is based on the following observation, society to meet their needs must
produce the material means of existence in the form of material goods, or services
necessary to ensure the material reproduction of society and thus the existence of
society. As human life was not insured by nature, if not for the productive work that
ensures food, shelter, clothing, health care, transportation, water, fuel or electricity. If
the only way to work, is as a paid, with wages paid take the raw product the goods
required for the material reproduction of its existence, it is called necessary labor time,
if we establish average conditions of productivity, or productivity is given, and the
salary is the same in all cases, the salary is equal to the necessary labor time divided by
the number of workers salary equals the labor time necessary. The crude product can
be divided as the basket of goods to be exchanged for wages, working time required,
and the goods to be consumed by the propertied class of the means of production, which
is the surplus labor time, the surplus will be acquired with the profits obtained by
capitalists. To do this we must assume that the economy is closed, and no fixed capital
is used, all capital is created and consumed in the period, if we apply the average rate of
profit, is unique to this model because it does not grow or diminish reproduces past
conditions. The price of goods is given by the formula (1 + g) Cost, Cost = inputs +
wages, profit is gCosto, and gCostos = g costs
g Costs = Surplus, g = Surplus / costs, this it follows that g = Surplus / (constant +
variable capital), Capital working time constant is used to produce means of production,
Capital Variable working time required. The means of production used by producers of
goods for final consumption equal working time used in the production of constant
capital, or time required and surplus sector 1, the amount of time required more time is
surplus equal to the gross domestic product . As this also happens when we move
prices, the sum of profits over wages in the sector 1 is equal to inputs sector2, and total
profits over wages equals gross product, we will use these equalities to determine prices
based . working time
model expanded reproduction, or capital growth model; in this case for capital to be
appraised increasingly part of the gain no longer consumed to capitalize, here a credit
system where banks act as intermediaries between the owners of deposits and borrowers
is introduced; These accrue interest as partners credits makers since they are the owner
of the means of production given a loan in the form of money.
The theory of value implies that all forms of wealth enters the circuit of capital, where
capital reflected in the actual field the different stages of production, distribution and
marketing of goods is the incorporation of value as a time of human labor accumulated,
which is derived from a joint and collective effort that is put into effect in a production
process, which depends on large accumulation of means of production owned
appropriating part of that effort, in many cases without any or escaza participation of
effort and proportion to the size of their capital. One of the fallacies in this society rests
is that capital is the result of effort, savings and innovative capacity of the capitalist
entrepreneur, today we note that this latter quality to been replaced by employees
responsible for the management of the company where the owners are own shares,
which get profitable returns, not much different from a bondholder or owner-term bank
deposit. From this we conclude that private ownership of the means of production is
another fallacy from the previous one and actually the means of production and all
forms acquiring capital is a social and not private product. The average rate of profit on
capital, contradicts the different compositions of capital and employment and the
incorporation of value, this contradiction is resolved by transferring surplus intensive
sectors labor to capital-intensive, read this as forms collectivize then distribute only it
distributed giving more to it more rewarding bad owns and effort.
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