Question

How are capitalists able to get a profit from the production and sale of products according to political economy? What is the role of unemployment in enabling capitalists to get profits?

Answer 1

How capitalists able to get profit from production and sale of products according to political economy

To get the profit from production and sale of products , the labour plays a very important role. The capitalists who are the owners of the goods enjoy the production and sale of products very happily by exploiting workers. The pay workers the correct wage but they make workers to work more hours than its is required. Now suppose if the capitalists pay its workers 6 dollars per day and he works for 15 hours per day . Therefore one labour hours is equal to one dollar now for every 15th hour but the capitalists pay them only 6 dollars per day. Hence this surplus earned by the capitalists is their profit earned during the production and sale of products. But this was the tradional view of earning profits by the capitalists now a days economists thinks that capitalists earned profits now by exploitinh workers but by higher consumption taking more risks. As high risk means high rewards.

The role of unemployment in enabling capitalists to get profits-

• The major objective of the capitalists is just to earn the profits. The look for the profits earning techniques so as to maximise the profits .
• The interest of every capitalis is that to use smaller quantity of labourers than greater amount of labours if the cost is still the same.
• They just have the basic idea that less labour should be ultilised and those labourers should be efficient to give sufficient amount of production to give profits. They want to earn profits by incurring low cost. Hence this causes unemployment as capitalists do not want more workers .
• The capitalists production uses new technologies which replaces the workers causing unemployment. New technologies gives low cost cost to production per unit and hence profits are increased.
• Due to the technology changes the capitalists even scare the existing workers to work more . The workers have to do so i fear of losing job and that too at the same wage rate.

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