CAPITALISM

Capitalism

Ans1.

Neoclassical theory has been a part of every economic class as it is the most dominant theory in economics. The theory attempts to solve the problem of valuation problems that overwhelmed classical economics by the introduction the rational choice and utility concept in theories. Hence, this theory explains the demand and supply relation to the rationality o the individuals and their ability to make the most of utility or profit. Beside the assumption of human are rational actors, the other three dimensions are firm maximization of profit and individual maximization of utility and finally people behavior independently on the basis of relevant and complete information. The theory has been criticizes by many of the economist as it does not represent the reality. Austin well known economist disagrees with the analysis of individual maximization of utility. He state that maximizing assumes that individual apply known means to known ends and firms countenance known cost and revenue curves. Looking at this situation of perfect knowledge the optimal course of action is implied by data. Any theories that are concerning the perfect information that is prices, qualities, costs and revenues cannot be perfectly understand actions that plan at gaining or spreading knowledge.

Another criticism by economist are that output of the firm as measures of efficiency and keeping standard of the perfect competition. Therefore, consumers give value to quality that is offering compensation that does not enter into the index output, nevertheless, provide to the output index in the previous remedy planned to measure. Moreover, this neoclassical theory model assumption that never rally by reality should not use against those standard that measure reality. The involvement of abstraction in neoclassical theory, which in the end face loss of realism, which is the involvement of abstraction cause loss in knowledge and concluding as abstraction a mode of non knowledge. In my opinion, this is a wrong view of abstraction which is leading to the paradoxical outlook. The view of abstraction is not an operation of thought, but when we know something is real concerning reality, except ignorance of operation is something we avoid about reality. Thought or abstraction deviate us from reality rather getting closer to it (Bowles S & Edwards R., et al., 2005).

Ans2.

This situation resembles feudalism more than capitalism because feudalism is a decentralized practice that consisted of a tripartite relationship between a lord (who was the owner of the land), the land or property (known as a fief) and the vassal (or worker). A contractual relationship was set up between the lord and the vassal based on mutual, reciprocal obligation. A lord granted land/property and protection to his vassal in exchange for military services and labor, and a vassal would provide military and other services to the lord in exchange for protection and land. The hierarchical relationship between the lord and vassal was replicated at different levels of the social strata. At the top, of the hierarchy was the king or emperor of the state, who loaned out land ...