Economic Theories of Karl Marx and David Ricardo

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Economic Theories of Karl Marx and David Ricardo
Economics has long been studied, and different economists and schools of Thought have shaped it. These contributions have often been met with disagreement and different perspectives, resulting in various economic schools of Thought. This paper compares and contrasts the work of two economists from other schools. Karl Marx and David Ricardo will be examined as their economic thinking will be summarized and compared. Finally, their ideas' current relevance will be assessed.
David Ricardo
British economist David Ricardo was born in 1772. His contributions to classical economics, a school of thinking strongly emphasizing the market and free trade, are well recognized. Ricardo's most significant contribution to economics was his idea of comparative advantage, which clarifies why business is advantageous for nations (Bernhofen and Brown 228). According to Ricardo's theorem, a country tends to specialize in and export those goods for which it has the most significant comparative cost advantage or the most negligible comparative disadvantage. This idea would lead to more effective manufacturing and international commerce, eventually boosting welfare. Ricardo also created the rent theory, which clarifies how landowners profit from their investments. According to Ricardo, rents paid to landlords will increase as long as the land is needed (Bernhofen and Brown 229). Nevertheless, since there is a shortage of land, the supply cannot grow, which raises prices. This claim still holds today, especially in light of urban land-use rules.
The notion of Ricardo's theory of rent explains how landowners might make economic rent as a consequence of owning land. According to Ricardo, the differential in production between the currently utilized most productive and least productive lands determines the land rent. More marginal land is used when demand for land rises due to population expansion or greater economic activity, which raises land rents.
Ricardo says landlords may get more money from land rent without working harder or spending more. He said landlords profited from economic growth at the expense of industrial workers and company owners. Ricardo's rent theory has shaped urban land-use policy in places with limited land and severe competition (Kishtainy 90). High land rents in modern cities may force landlords to evict low-income tenants to build more expensive homes. Governments regulate land use to provide parks, transportation, and affordable housing.
Karl Marx
German philosopher and economist Karl Marx was born in 1818. He contributed to Marxism, which stresses work and class conflict. Marx felt capitalism was defective and would inevitably fail. He claimed that capitalists stole workers' surplus value (Kishtainy 81). Marx predicted capitalism would collapse because of worker-capitalist tensions. He felt that a socialist society with worker-owned means of production would emerge from this collapse. This unworkable ideology has inspired numerous socialist groups worldwide.
Marx's state/government theory is complex. He believed that the "base," or economic structure, determined a society's laws, institutions, and social interactions...