Chapter 1

Chapter 1

Karl Marx

modern world is alienated. Work will lead people to happy life, but in order to work people have to see theirselfs as objects they have created (chair example, strong elegant). work during capitalism is alienation because devision of labor is a dismatch by what you do and who you are

workers get pay little while capitalist get rich. Capitalist shirk the wages of the employees for wide profit margin. Profit is theft, exploitation.

Unstable economy --> we can produce too much by capitalism. Too efficient. Unemployment should be described as freedom. The surplus money from the workers should be devided to everyone also the people who doenst work.

People get relations with each by financial reason instead of love through capitalism. He want people to be freed from financial constraints to start a healthy reltionship. People should enjoy leisure.

Materialism drives people in everyday life. Labor and capital

Labor is social instead of induvidual because you have to cooperate

Marx severely criticized Adam Smith’s idea that individual economic interests somehow come together and further the general interest of society, as through “an invisible hand.”

The most important interests are similarly of a collective nature—what Marx calls “class interests.” These interests, however, will be effective only if people recognize themselves as belonging to a certain class

Capitalism is an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state.

Max weber

weber said that capitalism was possible through calvinism. 1. protastantism makes you feel guilty. only god is the one who is able to forgive. They have to wait till god forgives and therefore they life anxiety as well as lifelong guilty desires. God loves hard work so the guiltyness will turn out to  hard work. God love all hard work

bureaucratic authority achieve its power by knowledgde. Ideas are far more important than tools or money in changing nations

The theory of the firm:

maximizing profit, subject to the constraints of technology and demand. A standard tool for analyzing the firm in twentieth-century economics has been the so-called production function, which is typically defined as “the technical relationship telling the maximum amount of output capable of being produced by each and every set of specified inputs (or factors of production); it is defined for a given set of technical knowledge”

He also points out that people are not as careful with “other people’s money” as with their own; and that this makes the interest of the owners of a joint-stock company diverge from that of its manager:

Transaction cost analyses coase:

When prices change, individuals and firms adjust to this fact on their own accord because it is in their self-interest to do so. so:

two different ways of organizing an economy: through the market and through a firm. Markets and firms represent “alternative methods of co-ordinating production”

“The main reason why it is profitable to establish a firm would seem to be that there is a cost of using the price mechanism,” The cost of using the market, he says, covers such items as the cost to acquire information, to draw up a contract, and so on.

Agency theory p`102

durkheim

capitalism and industrialization creates unhappiness and  leads to suicide.

1. individualisme. (In traditional society people belong to a class. so before they never made self conscious decisions by theirselfs because classes were already created. Capitalism leads to individualism, people chose by theirselfs. So it is more common to make mistakes and no-one but you are the one who made the mistake, nobody to blame but just themselfs)