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The Nature and Causes of Profits: The Classical Approach from Smith to Marx

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  • Sean Kimpton

    (Department of Economics, Faculty of Business and Law, Auckland University of Technology)

Abstract

The Global Financial Crises has motivated some to rethink the dominance of global capitalism. This has revived an interest in Marxist doctrine and in particular its examination of the notion of exploitation. Marx’s theory of value is central to his examination of exploitation. This paper will show that both these posits of Marx are in error. Further, it will show that Marx draws heavily on Smith’s idea of the primacy of wages. However, this paper will demonstrate that profit, and not wages, are the original source of income. This paper reaffirms the importance of profits and the ability of entrepreneurs and capitalists to pursue them.

Suggested Citation

  • Sean Kimpton, 2014. "The Nature and Causes of Profits: The Classical Approach from Smith to Marx," Working Papers 2014-07, Auckland University of Technology, Department of Economics.
    • Handle: RePEc:aut:wpaper:201407
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    Keywords

    Adam Smith; Karl Marx; Profit; Exploitation; Labour Theory of Value; Classical Economics;
    All these keywords.

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