The Accumulation of Capital Essay Example for Free

The hookup of Capital testJoan Robinson (1903-83) is one of the leading economists of the 20th century and the only woman among the great economists. Her writings on sparing development show a strong sense of the historical context of social change and a concern with scotch organization and institutions rather than resource allocation. The humanity of al living beings has the character of certain economic relationships.For example, in her work The Accumulation of Capital (1956) Robinson shows how from the economys point of view a human being can practice the behavior of an ordinary robin, and proceeding from this comparison she notes that economic look of humans is incomparably more complicated and needs very profound analysis. According to Robinson a multitude of people who specialize and co-operate are more likely to produce far greater results than the sum of their breakaway efforts. Basing on this simple fact, she continues, human economies develop into very intric ate involvedes of specialized activities.The method of distribution of the output of meshwork activities then becomes all-important(prenominal). After the distribution of the products the capriciousness PROPERTY comes to light. There are a great bout of societies on the planet, which live in accord with different types of economies. For example, there is slave economy, bullyist economy, socialist economy, and so forth The methods of distribution of the product of interlocking activities in each of these economies are cardinally different. Robinson claims that no positive economy conforms to a comminuted type.For example when she speaks some the economies, which are predominantly capitalist, she states that they contain many elements of payoff for home consumption, many elements of discoverer production and many elements of socialism. This book deals predominantly with capitalist economy. It explicates certain capitalist rules, under which anyone who has sufficient acqui re power, or finance, and knows how to set about it, can become an employer of labor or enterpriser. Then on the explanation of what entrepreneur is and how entrepreneurship developed is wind.For example, she compares the historical and modern notion of entrepreneur in the early days of capitalism the characteristic entrepreneur was an individual who had invested his own finance in a business which he managed himself and bequeathed to his heirs as a going concern. The entrepreneur in modern conditions is a very amorphous conception in brief, it is decision-taking entity, embodying the indemnity of a firm. The capitalist rules of the economy encourage large-scale production and the use of elaborate techniques. This raises output per man practically above what an artisan can achieve.Thus, one of the tasks of entrepreneur is, in fact, to organize his employees in such a way to reach the highest possible output. In the following chapters Robinson presents the traditional categorie s in which the sources of income are usually shared out like wages, rent, interest and profits. She also provides very clear and complete explanation of each of these categories. According to Broadly, economic wealth is the command over goods and operate that are desired, or consuming power for short. The significance of production lies in the consumption, which it makes possible.The motive of each individual is to get command over money, and a flow of goods and services suitable to meet human wants emerges as a byproduct of their efforts to do so. Thus the purchasing power of individuals and groups is the major influence on their consuming power. The purchasing power in legitimate price of a sum of money consists in a list of all the possible goods and services that it might buy. Purchasing power must be examined, so to say, in two layers the command of an individual or group over money, and the command given by a unit of money over goods and services.She states her adjust t hat the marginal productivity theory is not appropriate to explain the distribution of the national income amongst capital and labor, because, as she explains it is impossible to measure capital independently of labor. When assessing purchasing power we cannot do without such notion as money. Generally, money and its function is one of the central notions of economy. The economy is monetary, because there is specialization and exchange between different groups.Robinson underlies the importance of presenting the price level in terms of money, but she does not leave away the importance of labor invested in the product. As she observes, many contracts besides the wage bargain are make in terms of money, and changes in the purchasing power of money bring about opposite changes in the real benefit and the real cost of the payments concerned so long as the contract holds. precisely in the long run all contracts are revised, so that a change in the real value of money becomes just a cha nge in words.Over the long run the important price level is the price level in terms of labor time, for this expresses the distribution of the total product of the economy between work and property. Robinson concludes her book with the chapter which deals with the importance of equilibrium in economic relations. She presents different models of economic cooperation and comes to conclusion that an economy, which existed in a state of tranquility, lucidity and harmony, would be devoted to the production and consumption of wealth in a rational manner.She emphasizes the necessity to describe these conditions to see how remote they are from the states in which actual economies dwell. Traditionally she resorts to the showing the real example on capitalist model, which could never fool come into existence in such conditions, for the divorce between work and property, which makes large-scale enterprise possible, entails conflict and the rules of the game have been developed precisely to ma ke accumulation and technical progress possible in conditions of uncertainty and frail knowledge. Yet too much disturbance, deception and conflict would break an economy to pieces.The persistence of capitalism process to day is evidence that certain principles of coherence are imbedded in its confusion, concludes Robinson in her work. The models of economic concepts in Joan Robinsons The Accumulation of Capital are very easy to understand and provide insight into the fundamental elements of an extremely complex process of economies. By concentrating on the purely economic strands in the process of development we can provide a practical guide to understanding history, and indicate to people how best they might set about their task.The Accumulation of Capital deals with money, credit, finance, interest rates, and banks. Joan Robinson exhibits her clear comprehension of the complexities of the financial world. Moreover, she appears to be able to provide a novelty of comprehensive vie w of the relations between the financial system and the macroeconomy. This book is a undefiled source of valuable information on money, credit and finance. Reference Robinson, Joan (1956), The Accumulation of Capital, Macmillan, London.