Marxian Economics refers to an economic school of thought that has developed from the works of Karl Marx (1818-1883). Marxian Economics is relevant to the contemporary economic issues. It provides an analysis of capitalism and offers views, theories, and models in other economic fields. Since Marx’s death, there has been a raging debate over conflicting interpretations of his work. These debates have contributed significantly to the development of Marxian Economics. This study interrogates the main ideas of Karl Marx through an analysis of the Marxian Economic principles. It discusses the foundation and the basic tenets of the Marxian Economics. The article will begin by presenting a brief overview under which the work of Marx was founded, and then introduce the major theories that have been postulated by Marxian Economists.
Karl Marx was a German philosopher and one of the most influential contributors to the field of economics. Political and social upheavals motivated his ideas and criticisms and influenced by the German philosophy and French socialism. He was a staunch critic of the classical political economy. He believed that the capitalist system that was employed by the bourgeoisie (ruling class) was oppressive to the proletariats (working class). Therefore, his ideas revolved around materialism, exploitation, alienation, and revolution.
According to Karl Marx, materialism is a principle that defines the relationship between the economic systems, political institutions, law and social consciousness. The interplay between these factors sets conditions for productive forces and stipulates requirements of means of production. According to Marx, the society is divided into two: the Capitalist and the Proletariat (Worsley 20). The Capitalist class is composed of few elites who own and control resources and productive forces. The Proletariat depends on the Capitalist for a living. It results in a disparity between the two classes. Marx argues that materialists are those who use their social, political and economic power to control other institutions, including resources and factors of production. Those who control productive forces (the wealthy) also the can influence and control political institutions and the society in its entirety (Korsch 32). Marx describes the productive forces as the economic base, and it consists of all the factors of production and their relations.
The second fundamental premise of Karl Marx work was exploitation. Marx argued that the bourgeoisie exploit the proletariat to accumulate their wealth (Worsley 6). He believed that a capitalist system was propitious for the exploitation of some members of the community. To explain how capitalism exploits its subjects, Marx postulated the theory of capitalism. He argued that, in a capitalist system, the bourgeoisie pay the proletariat less than they are worth to accumulate profits (Worsley 7). In other words, in a capitalist, the value of labor is higher than its cost. It results in surplus value. The surplus value is used to maintain and accumulate more wealth at the expense of the working class. Marx equates the accrued profits to exploitation. He argues that a capitalist system is unjust because it results in unequal distribution of benefits. The benefits of the resources are concentrated in the hands of few elites. Ultimately, this might culminate in social conflict between the Capitalist class and the working class.
In his conceptualization, Marx believed that workers under capitalist were alienated. He outlined four elements to elucidate this alienation. According to him, the isolation stems from products of labor, the act of labor and estrangement of the worker from each other (Worsley 25). The fundamental underpinning of this argument is that capitalists separates workers from products and the production processes, and impedes the interaction between workers. This results in degradation of nature of work and prevents workers from realizing who they are. This is dehumanizing.
A protracted ideological control leads to false consciousness. Marx describes the false consciousness as the delusion that everything is fine, and it hinders the proletariat from realizing their common interests (Worsley 36). Ultimately, the working class realizes the truth – the Capitalism was unjust. The realization is a wakeup call to rise against exploitation of the capitalists. Eventually, the workers unite through a revolutionary class-consciousness and topple the Capitalism. According to Marx, a capitalist structure paves the way for a revolution that replaces the existing order with a fair and just system. Although Marx did not call the resulting structure a ‘communism,’ it has the attributes of a communist regime. Nevertheless, the communist states in the contemporary world are not exemplary of the one described by Marx.
The Marxian Economics is made up of several fundamental concepts. They include class struggle and history, capital and capital accumulation, the labor theory of value, prices and cost, exploitation, and imperialism (Korsch 13). Other concepts include divide and conquer strategies, commodity fetishism, religious superstitions, and technological change. The class struggle is the antagonism between the rich and the poor because of the disparity between their socioeconomic interests. This concept was propounded by Karl Marx and Friedrich Engel in 1848. According to them, all political changes in the society are triggered by collective struggles of the majority who are predisposed to similar economic adversities. Groups of people with common economic interests come together and push for revolutionary changes in the existing settings.
These struggles have been commonplace, from the ancient Rome to present day. They are efforts by the subordinate classes to topple the dominance of few elites who are opposed to reforms that would provide for the interests of all the citizens. Despite the high levels of industrialization in the world today, unemployment and debt levels are still high. Also, the low rates of incomes are not adequate to raise the standards of living of many workers. This is a common phenomenon worldwide. The modern system is unjust and self-destructive. According to Marx, a capitalist system tends to impoverish the majority of the populace, while at the same time enriching few. This widens the schism between the rich and the poor. Historically, the class struggles of different social formations have taken different forms. In pre-capitalist social formations, the land was a crucial factor of production and patterns of land ownership defined the different classes. According to Marx and Engel, the different social classes were “lords and serfs, patricians and plebeians, and guild-master and journeyman”(Engels2). For example, in ancient Rome and Greece, the dominant classes derived their surplus by exploiting the peasants. This resulted in class struggles. In the modern industrial world, class struggles stem from poor wage rates and unfavorable working conditions. Despite long working hours, the wage rates have stagnated. This has triggered class struggles as workers seek equal distribution of economic wealth.
To formalize his theory of capitalism, Marx postulated the labor theory of value. The essential underpinning of the qualitative dimension of this theory is that human labor defines the value of all commodities. The quantitative dimension revolves around the magnitude of value. The proponent argued that the magnitude of value depends on the amount of labor input associated with a commodity, although it may not necessarily be equal to the value of the commodity in the market.
Marx created a distinction between dead and living labor. Dead labor is limited to means of production such as raw materials and machinery while living labor is the one provided by workers. Paid labor should be paid for. Unpaid labor produces surplus value, which is a source of profits and interests. Therefore, there exists a nexus between labor and surplus value. The theory of labor was a pathway to the formulation of the theory of surplus value. Marx employed the theory of surplus value to base his argument about the exploitative nature of capitalism. In a capitalist system, a commodity is the carrier of value because it is responsible for satisfying human wants. Thus, the value of a commodity has inherent quantitative and qualitative characteristics. These characteristics of labor correspond to the nature of labor. The labor can be either useful or abstract. Useful labor is responsible for the satisfaction of human wants. Marx argues that labor alone cannot create use value. Labor must act on the matter to produce value. Thus, a commodity is described as so if it possesses exchange value, and this exchange value is determined concerning a given commonality. According to Marx, this commonality is the “abstract human labor.” Therefore, the value of a commodity is determined by the value of human labor, and the difference in value is due to different quantities of labor required to produce them.
Marx breaks down capital into two components, namely constant capital and variable capital. Constant capital does not increase the quantity. Variable capital substantiates the wage-goods, which increase its value because it relies on surplus labor. Thus, the value of the final commodity depends on constant capital (c), variable capital (v) and surplus value (s). The same applies to the total product of the society. According to Marx, capital accumulation results from the continued conversion of surplus value into capital. Capitalists must accumulate their capital to maintain their status as competitors. If they did not, they would be predisposed to competition, which would turn them into consumers. Marx argued that this tendency of capital accumulation creates a disparity between the rich and the poor. It increases the wealth for the capitalists, whereas it impoverishes the majority. Also, capital accumulation converts a workplace into a degrading environment, which degrades the workers and ruins their morale. Capital accumulation creates two extremes: it enriches few people at one pole and impoverishes the majority at the opposite pole. According to Marx, poverty and misery are inevitable progenies.
In the modern world, there exists a vast range of evidence that tends to corroborate the propositions of Marxian Economics. The findings of many studies can be adduced to explain the existence of capitalism. From statistics in the public domain, the gap between the rich and the poor continues to widen each day. According to the findings of a study conducted by the Economic Policy Institute, the median earnings of workers in the US continue to decline. Between 1980 and 2010, about seventy-four of the total wealth gains in the US went to five percent of the total population. A replica of the situation is evident in other parts of the world. The widening inequality has resulted in class struggles. Workers are no longer satisfied with the unequal distribution of wealth. The growing tensions have been playing a pivotal role in shaping the political and economic arena. The growing tension is explicit in the US. According to the findings of a study by Pew Research Center, two-thirds of the US population believes that the tension between the rich and the poor has escalated in the recent years. The growing conflict has pervaded American politics, with much of the debate revolving around the nation’s economic policy. The class struggle is also evident in other states such as Greece, Spain and Portugal.
Class struggles do not necessarily translate into revolutions. Lenin stipulates the conditions for a revolution. According to him, a resistance erupts when the working class is no longer willing to conform to the traditional style of rule (Worsley 14). Marx also explored the conditions necessary for a revolution. He argued that a revolution is actuated when there is an active man-in-the-mass. He argued that a mere theoretical consciousness does not translate into a practical resistance. However, Marx asserts that the theoretical consciousness is a catalyst for a revolution. A combination of these factors can incite workers into a state of paralysis and passivity. According to Gramsci, different times can influence radicalization to varying degrees. Protracted crisis can extend ideological radicalization to other groups of the population. A revolutionary crisis can be triggered by the schism between the lower class and the capitalist, or between different groups of the capitalist class. Lenin posits that a revolution that erupts due to class struggles can lead to inter-state political fragmentation. This is exemplified by the political crisis in the Eurozone where French and German administrations are involved in political tussles (Korsch 15). The tensions between the extreme classes have precipitated revolutionary leadership.
From a global perspective, it seems the working class is winning. In the US, despite opposition to calls for reforms, the impetus of struggles cannot be overlooked. Marx and Engel argued that capitalism enlarges the working class. In the modern world, a significant working-class translates to a more powerful revolutionary force. Despite the escalation of tensions of class struggles, many countries lack revolutionary leadership. As aforementioned in the foregoing discourse, self-consciousness is one of the recipes for a revolution. However, the consciousness must encapsulate an organization crystallizing. This is the condition of the class that determines the success or failure of a revolution. Thus, the effects of a crisis are significantly influenced by its success or failure, in addition to the existing political situation.
In his pamphlet “Imperialism: The Highest Stage of Capitalism,” Lenin attempted to explain the destructive nature of the imperialism in the 19th century. According to him, a certain definition of modern imperialism must satisfy five conditions. First, capital and production are concentrated in the hands of few that it creates monopolies. Second, bank capital and industrial capital are merged, resulting in a financial oligarchy. Three, the finance capital is converted to export capital. Four, there is the formation of international monopolies, which concentrate economic benefits in the hands of few. Finally, the world is divided into territorial divisions by the capitalist powers. After the Second World War, there emerged the concept of globalization. Due to globalization in the twenty-first century, the international capitalist system has increased and expanded its operations to conform to the logic of imperialism postulated by Lenin. Some pundits have argued that globalization has ended, or at least reduced the class struggle. This is not the case. Rather, it has altered the course of the conflict, changed the subjects of the conflicts and the nature of issues, and brought new antagonistic strategies. Nevertheless, globalization does not influence the outcome of a class struggle.
This paper concludes that the Marxian Economics is relevant to the study of economic issues facing the world today. Through analysis, the paper has found a significant correlation between the contemporary economic issues and the Marxian economics.
Engels, Frederick.Socialism: Utopian and Scientific.New York: International Publishers, 1935.
Korsch, Karl. Marxism and Philosophy.NLB, 2008.
Worsley, Peter. Marx and Marxism.Routledge, 2002.