Difference between Solow and Marx’s Theories in Relation to Technological Process Change Essay (Article)

September 29, 2020 by Essay Writer

Introduction

Research shows that technology and economic changes are related to each other. However, it is not clear on their causes and effects. Nevertheless, the results of such changes are not predicted that easily. A variety of authors have come up with different views relative to the process of technological change and they seem to be in contrast with each other.

Due to these contrasts, the formations of economic theories do not have to be directly linked with technological issues and their “impact” was not such accredited (Bimber 1990). The Karl Marx theory’s mission was to promote change that would improve the society.

Marx talked in depth about the capitalist system, in a “dynamic” view. To come up with a conclusion he studied the development patterns in society through the “materialistic dialectic approach” (Blinder 2008). In the writer’s opinion he believes that capitalism is a stage in history that is full of different “contradictions” that tend to explain the phenomena.

However, in Solow’s view an economic system can be represented by a production function that has the same returns. Nevertheless, Solow cited production and labor as the two production factors and that technology can be seen as a factor that may change the look of the production process. In this paper I look into the views of the two writers to point out the differences between them in relations in the process of technological change.

Difference

Solow believed that capital and labor are not the only causes of economic change just like Marx stated. Solow demonstrated that the increase in the economy cannot only be accounted for by changes in capital and labor only and that technology is a driving force in these economic changes.

Marx analyses on the issue of technology relative to economic and social changes seem not to be clear. Marx believes that changes in technology affect the relationship between the “forces” of production that is capital and labor and finally affecting the social structure.

However, Solow accounted in his theory that there is a portion of the economic growth that is often not accounted for, and this can be attributed to the changes in technology. Marx’s theory divides the economy into two stages of the pre-capitalist economy that is not affected by technological changes because there is no capital and labor forces since the initial “appropriation” is not available and capital are free in the economy (Bimber 1990).

However, in the second phase technology causes the substitution between the capital and labor factors in the process of production and in the end affecting the economic and social factors. However, the changes in technology here are only functions of the economic and social systems.

Solow refutes the notion of the effect of capital and labor by technology changes suggesting that only technology can explain the economic changes but not capital and labor factors that affect economic growth.

Implications

Clearly, the two theories illustrate that to change the growth of output per head one has to change the rate of technological “progress” (Blinder 2008). This implies that factors that affect both economies and distribution are related and that the distribution of income and wealth will be unequal due to technological changes. Some people may have more wealth than others because they might be ahead in terms of technology.

My View

I believe that the growth of the economy determined by factors such as capital, labor and technological changes. Clearly, the rate of change of technology is an “exogenous” variable that can be explained by the gap in the economic growth.

References

Bimber, B. (1990). Karl Marx and the Three Faces of Technological Determinism. Social Studies of Science 20 (2), 333-351.

Blinder, A. (2008). Solow, Robert (born 1924): In the New Palgrave Dictionary of Economics. Online Journal, 5 (8), 56-87.

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