Marxist Political Economy (Essay Sample)

MARXIST POLITICAL ECONOMY
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MARXIST POLITICAL ECONOMY
A number of fundamental theories through history have contributed to the concepts of economics as understood today. One key theory is Marxist political economic theory developed by Karl Heinrich Marx in the mid 1800s (Texas A & M University, 2011). Even though Marx is better known for his socialism advocacy, the economic aspect of his ideologies is distinguished from his socio-political theory, often referred to as Marxism. Opposed to capitalism Marx developed an economic concept that sought to bridge the gap between property owners (capitalists) and workers in a business relationship (Trainer, 2010). Marx viewed capitalism as extremely exploitive to the employee. This paper is a critical analysis of Marxist political theory.
Marx’s main ideology was on the empowerment of the poor in society whom he viewed as greatly exploited by political and economic systems (Texas A & M University, 2011). His theories brought together economics and politics and built on the interrelation of the two. Earlier economic theories mostly viewed economics as independent and only affected by economic forces of supply and demand as explained in marginalism. Marx sought to show that politics and social factors have a role to play in determining a country’s economic outcomes. To him economics was not just a system of mechanisms, but a dynamic and complex system that involves unpredictable inputs like political upheaval or regime change.
Marxian economic concepts developed in the backdrop of a dynamic economic field where both industry and economic study was undergoing transformation. Scholars associate this period of time (1840 to 1900) to the transformation of the world economy from agrarian to industrial. This transformation meant a shift in major concepts that defined profitability, business, and trade. The agrarian economy was characterised by production that relied upon hiring of subjects that worked for wages (Texas A & M University, 2011). The produce would then be traded for profit from which the employer would subtract wages for workers and retain the rest. This typical business system created and helped to establish capitalism.
With the industrial revolution, capitalism was adopted in the new economic environment (League for the Fifth International, 2006). Workers were hired to work in emerging industries for wages, which were basically a portion of the profits derived. Competition between business entities resulted in the need for businesses to suppress expenditure and maximize profits, consequently creating the tendency for businesses to minimize wages paid to workers thereby suppressing them more (Dunn, 2011). Marx observed that such a system was not appropriate for economic growth and further suggested the need to create a broader means of distributing profits to benefit the workers. He argued that the worker played the major role in profit making and is therefore entitled to more than just a small portion of it.
More critically, Marxism theories were broad and were both political and socio-economical (Trainer, 2010). His economic theory borrowed much from his political and social ideals where he viewed capitalism as a form of dictatorship. To Marx, capitalism benefited the few rich and middle class who played the least role in economy building. He advocated for socialism where the working class had more power in the society. He envisioned that ultimately socialism would result in a worker’s state where class is non existence and everyone is equal economically in a pure communist society.
According to Marx, the impact of capitalism to society was negative especially when market competition was stiff. Business competition cause prices to decrease and would drive down the gross and net profit of a business. Businesses would then want to regain the same profits and this would cause them to take measures that would exploit the workers more (Texas A & M University, 2011). These include:
Creating unemployment to increase the number of workers competing for the same job.
Destroying and weakening worker’s unions.
Seeking for outside cheaper labor through off shoring.
Increasing productivity while maintaining the same workforce.
Seeking new markets for products.
These measures are likely to result in an increase in production that outweighs consumption and the market gradually becomes over flooded with goods, and this would force businesses to produce less. The eventual state of the economy becomes poorer than before. Marx used this argument to predict a fall in capitalism in the future that would be characterised by a global economic crisis.
Marx also criticised capitalism by saying it turned everything into a business commodity and degenerated human value (Ticktin, 2009). People become tools for use in businesses and their human values are not taken to consideration by business owners. Capitalism also resulted in a state of anarchy where governing and law enforcement institutions like the police are necessary (Litsch, 2011). Marx argues that in a classless society these would not be necessary, but there would still be need for bureaucracy to guide administration and planning. Another negative product of capitalism is a false sense of consciousness where both oppressors and oppressed are oblivious of the oppression taking place (Texas A & M University, 2011). They instead regard the state of events as normal and necessary. Marx held the view that down history workers would come to appoint of realising these evils of capitalism and revolt against it. He also closely held that revolution is inevitable because those who hold power would not relinquish it without force. He envisioned a state where society is polarized where capitalists are pitted against anti-capitalists, which would lead to an inevitable struggle (Ticktin, 2009).
While capitalism did not completely die in later years, much of Marx’s arguments were proven, with typical observations of economic crisis being observed during the modern economic conditions (League for the Fifth International, 2006). Marx’s ideas majorly focused on economic activity as the determining factor of all other aspects of society. He opposed Hegel’s idea that history is formed by ideas that people have. He was of the opinion that ideas are results of economic and materialistic conditions, and by transforming economic conditions society can be transformed.
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