Questions what is the main features of the socialist economy?

Illustrate your understandings about Ricardo`s Stationary State notion

Key words: accumulation and investment of capital, falling profit rates, rent.

Answer: The core of Ricardo’s theory exists in capital accumulation. While Malthus directly contrasts food with population, Ricardo incorporates food and population into the dynamics of capital accumulation. In Ricardo’s theory, the land representing nature is the key, that restricts the economy in capital accumulation. Technical advances cannot overcome the diminishing returns in agriculture owing to the restrictions of nature. In section 1, we argue Ricardo’s theory of capital accumulation, comparing it with the theories of Malthus, J. S. Mill, and Smith. In section 2, we discuss the inverse relationship between wages and profit in the accumulation process, since profits fund capital accumulation. We examine how falling prices of manufactured goods and rising prices of food affect wages and profit

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