Political Science

Neoclassic economics refers to the several economic approaches mainly centred around the determination of income, prices and outputs distribution in the markets via demand and supply mostly meditated via a theoretical income maximisation with constrained utility of individuals and profits that are limited by costs of firm enterprises employing the available factors of production and information according to the rational choice theory. On the other hand, Marxian economics are basically the contributions of Marx to the economy school of socialist political together with other developments by other socialists following this particular system. It can therefore be viewed as a wave within a wider socialist economics school, containing thoughts that are agreeable to other socialists and also thoughts they would not agree with. Marxian economics is thus developed around classes, the challenge of the recurrent crises brought about by the capitalist economy and the fundamental change that is desirable in the system of political economics (Philp, 2005).

Neoclassic and Marxian economics
According to Marxian economics, the most significant market economy characteristic was that it allows a swift growth in the abilities of increasing production. Marxian economics claims that a market that is growing stimulates an enhanced division of labour that is, workers and businesses specialisation. In turn, this leads to increased productivity and a higher level of economic activities. Increased labour division is capable of causing harm at some point according to Marxian economics. Such division is likely to harm the individuals whose jobs eventually become more and more narrow with increased labour division. Both Marxian and neoclassical economics are in agreement on the idea that markets are important in stimulating productivity within an economy and thus they should be supported so that they can develop and mature and at the same time be dynamic. However, the two economic approaches differ in respect to the effect of labour division on the individuals. Whereas Marxian economics argues that it is likely to harm the people whose jobs ends up becoming narrower due to increased division, neoclassic on the other hand claims that people whose jobs becomes narrower are more likely to benefit since they can specialise in one or two areas they are best at. Labour division according to neoclassic economics makes people more productive since they can be more efficient in the tasks they carryout regularly (Samuels, 1990).

Marxian economics employs the value of labour theory, according to this theory a commoditys value is the socially required time of labour that is invested in it. Going by this theory, it means that the capitalists do not pay their workers or employees full commoditys value they produce, they rather compensate them for the time required and skills in the production of such commodities. Marxian economics theorised the difference between the wage of a worker and the value of his or her production, as the surplus value of the unpaid labour. Furthermore, Marxian economics have the propensity of obscuring the social processes and relationships of production, Marxian economics calls this particular phenomenon the commodity fetishism. In this case, individuals are well aware of products and often do not think in regard to the labour and the relationships they present (Wood, 1993).

On its part, neoclassic economics argues that the value of commodities should not be based on the socially required time of labour that is invested in it, but the value of the commodity in the market. Since products have their use value, which are the utilities derived from the commodities directly and their exchange value that is, the estimated equivalent of their value to the prevailing market prices, then this should be the basis of compensating for labour employed in the production of such commodities. This explains the surplus value in neoclassic economics that is, the disparity between the value of a workers production and the wages he or she is paid. In addition, neoclassic economics argue that wages should be based on the demand and supply of the skills and techniques of workers in the market. This implies that, if the skills and techniques possessed by a worker are not readily in the market, then such a worker will attract more pay compared to a worker whose skills and techniques are common and readily available in the market (Roberts  Feiner, 1992).

In neoclassic economics, individuals have preferences that are rational among various outcomes, which can be associated or identified with some value. In this case, the individuals are in a position of making such decisions at a personal level. The same case is not applicable with Marxian economics, which argue that preferences have to be in accordance with the majority of individuals within the society. There is therefore the levelling effect in that the value of the chosen preferences is not to benefit a single individual but the entire economy as a whole. In neoclassic economics, the individuals have to make economic decisions that will eventually maximise their utility, while the firms will make economic choices of maximising their profits. In this case, individuals will make economic decisions that will enable them to purchase goods and services of a high quality at favourable prices from the market they will therefore be in a position of obtaining maximum value for the money they spend on such products. On the other hand, Marxian economics propose that individuals cannot be able to maximise their utility without first maximising that of classes within the economy. Under Marxian economics, firms are not supposed to maximise their profits but serve as many people as possible in the economy.  In neoclassic economics, individuals have the freedom of acting independently on the grounds of relevant and full information (Moseley, 1995).

According to neoclassic economics, the market equilibrium is primarily based on the forces of supply and demand. This implies that these two forces should be responsible in the determination of prices of various products in the market. Therefore, if the supply of a certain product is scarce in the market, then its demand is likely to push its price to a higher level. The opposite would be true if the supply of a product is in excess in the market, it will have a lower demand which will eventually push its prices to lower levels. Marxian economics argue that this can lead to exploitation of either the consumers or the producers and market equilibrium brought about by forces of supply and demand should not be used to determine the market prices of various products (Wood, 1993).

On its part, Marxian economics suggests that the prices of services and goods in the market should be primarily be determined by the actual value of such services and goods. Therefore, in order to determine their prices, all the costs involved in their production must be computed in order to be recouped and the prices should be set at a certain margin. In this case, there arises a market that is not liberalised and which is greatly controlled by the government. Even though the profit margins and the consumers utilities are less as compared in neoclassic economics, both producers and consumers are shielded from unnecessary price fluctuations (Philp, 2005).

Neoclassic economics has the bias of normative, whereby it is not mainly focused on giving an explanation of the real economies, but rather describes utopia where Pareto optimality is applicable. In this respect, it assumes that people always act in a rational manner it therefore ignores significant aspects regarding human behaviour. This is not applicable in Marxian economics where such assumptions are not made since it is possible for people to make irrational economic decisions and hence affect not only themselves but the economy as well (Samuels, 1990).

Conclusion
Both neoclassic and Marxian economics have distinctive differences as they are developed on diverse economic approaches. While neoclassic economics is based on individuals in an economy making their own economic choices, Marxian economics is based on classes within the society making such decisions. The market equilibrium under neo classic is basically determined by forces of demand and supply while in Marxian economics, market equilibrium is mainly determined by the government since such an economy is less liberalised. The main focus of neoclassic economics is individuals them selves and firms and corporations are also deemed to be individuals also capable of making decisions. On the other hand, the main focus of Marxian economics is classes within the economy, which are responsible of making such economic decisions.