posted by Adam on .
why do the conditions characteristic of competitive markets normally lead profit maximizing firms to make choices about resource use that lead to an "efficient" allocation of resources.
I wonder if Marx or Engels would agree with the proposition that is stated as true. I suppose it centers on the meaning of efficient, and of course the reality or myth of competitive markets.
If you mean efficient as extracting the most economic gain from the resources, then there is little choice in the competitive environment, if one does not, others will, and the poorly allocator is out of competition, as net sales-costs become disadvantageous.
Marx would have proposed another view, in which, as in all things, the truth will be evident in time. But then he formed his ideas in a time of exploitation of the working class, as they were considered a resource that had to be "efficiently" allocated, and nothing more. Generally, we look at workers somewhat differently, at least in election years, but I do hear from a lot of folks complaining about the current government priorities in the
I would stick to your text answer, but consider other views. Good luck.