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‘Marx believed that capitalism was doomed, and he developed an intricate analysis of the ‘ law of motion’ of capitalist society to prove it’ (Fusfeld 2002, p 50). At one level his argument had a moral basis. He argued that the ‘inherent injustices of capitalism lead ultimately to social and economic conditions, which cannot be maintained’ (Fusfeld 2002, p 50). On another level his argument is sociological: ‘class conflict- between a decreasing number of increasingly wealthy capitalists and a growing and increasingly miserable working class- will lead ultimately to a social revolution’ (Fusfeld 2002, p 50).
To conclude his Final argument is economic, that ‘the accumulation of capital in private hands makes possible economic abundance; yet accumulation also leads to depressions, chronic unemployment and the economic breakdown of capitalism’ (Fusfeld 2002, p 50). At each level the idea of ‘conflict is emphasized: conflict between ideal reality, between capital and labor, and between stagnation’ (Fusfeld 2002, p 50). Out of conflict comes change, and in this respect according to Marx, capitalism must give way to another society in which conflict is replaced by ethical, social, and economic harmony. Furthermore, Marx argued that the crisis would become deeper and severe longer as capitalism developed.
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However Marx’s analysis of conflict within capitalist societies was limited by his theory of the ‘laws of motion’. He argued that conflict between classes created by an unequal distribution of wealth, and would ultimately lead to an unsustainable social situation prompting the demise of the world capitalist system. Thus, he perceived class conflict as the fatal flaw of capitalism. However his detractors would argue that conflict of some form exists in all human interactions and thus has existed in all political and economic systems, concluding that capitalism addresses this inherently human conflict in order to avoid crisis.
In a capitalist society according to Marx, the two great economic interests are those of a capitalist and worker. These two classes stand opposition to each other, since the capitalist can prosper only if the worker is exploited. In this respect capitalism is only the latest in series of social organizations in which one class exists at the expense of another, stated in the communist manifesto. Marxists would further argue that peoples dominated politically or economically by great capitalist nations now bear the burden of exploitation, poverty and unemployment
However as a proof of Marx’s errors, his detractors point to the rising living standards of modern nations. ‘The working class has not been subjected to growing misery, and labor unions have gained economic and political power in all major industrialized countries’ (Fusfeld 2002, p 50). Moreover, the working class
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has shared the increased wealth, income, and economic benefits that have been spread widely throughout all social classes.
In spite of all the ‘concessions’ that have been made to the working class, such as social welfare legislation, union organization and higher living standards Marxists contend that the ‘basic defects of capitalism remain, holding back economic growth and postponing the emergence of the abundant society’ (Fusfeld 2002, p 50).
Nevertheless Marx’s prediction of the triumph of socialism and the creation of democratic, egalitarian, and nonexplotive society has not proved accurate. ‘Capitalism was placed on the defensive by the rise of communist regimes in Russia and China, and by the spread of socialism through many of the less-developed countries’ (Fusfeld 2002, p 60). But in most instances, these non-capitalist economies developed authoritarian political regimes, new forms of economic and social inequality, and new aspects of exploitation.
Ultimately Marx argued, as Fusfeld states ( 2002) the economy could achieve widespread abundance and produce enough for all, and at that point in human history all people could be completely free, both politically and economically. Further more Marxist economics suggested that capitalism could not achieve this
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goal, as it prevented the full development of modern technology and resulted in periodic stoppage of capital accumulation.
However, it is evident that under capitalism technology has flourished. More so capitalism has provided the push for new productive industries, as it is a continued to growing and change. Thus such an economy offers more opportunities then a stagnant one. For example China is the manufacturing hub of the globe. Even though China has its roots in communism it is still regarded as an extremely influential capitalist society. Its cities are booming. There are more building cranes in china than in all the United States. China’s super-highways are filled with modern cars. Its research and development centers are state of the art. At the rate it’s growing, China will soon be the largest economy in the world. In these respects it is evident to conclude that under capitalism economies have grown and benefited, due to its productive nature.
Further more, in a Marx perspective, labor under capitalism is exploited as it is not paid the full value of the products and services it produces. ‘The capitalist employs workers at the current wage rate and works them for as many hours each day as possible, making sure that the value of the workers’ output is greater than the wage paid’ (Fusfeld 2002, p 61). This difference between the wage and the value added by the worker, which Marx refers to as ‘ surplus value’, becomes the capitalist profit. Exploitation of the worker can be intensified, and the ‘ surplus
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value appropriated by the capitalist can be increased, by an employer’s efforts to achieve lower wages, longer hours and an employment of greater number of women and children. Marx was correct in some respects, for example developing countries at present are experiencing high rates of exploitation. Women and children whom work in such exploitive environments in china for example for less then a few dollars a day are the truth in Marx’s theory.
More so, Marx critique of capitalism included a forecast of its inevitable break down. In some instances capitalism has served as an unstable society, which has been suffocated with conflict and crisis. For example the great depression and the 1987 recession. In both instances the economy had if not almost hit bottom. In a Marxist view this could be concluded as the demise of capitalism. However his detractors would argue that conflict of some form exists in all political and economic systems, concluding that capitalism addresses this inherently human conflict in order to avoid crisis.
Which in some respects is true. For example on black Monday of the October 1987 when a stock collapse of unprecedented size lopped twenty-five percent off the Dow Jones industrial average. The collapse, larger than that of 1929, was handled well by the economy and the stock market began to quickly recover. More so during the great depression certain strategies were adopted to deal with the crisis. The ‘ new deal’ was the name given by President Franklin D. Roosevelt of programs between 1933-1938 with the goal relief, recovery and reform of the United States
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economy during the great depression. The ‘ new deal’ had three components, direct relief, economic recovery and financial reform. In these respects one can observe the recovery of capitalist economies and their ability to continue to grow.
To conclude it is evident that crisis and conflict is inevitable in capitalism however such an economic system is able to adapt and recover from such conflict.
References student no. Z322093
Campbell, D 1996, the failure of Marxism-the concept of inversion in Marx’s critique, Dartmouth Press, London
Cohen, G A 1978, Karl Marx theory of history, Oxford University Press, London
Culter, A, Hindess, B, Hirst, P & Hussain, A 1977, marx’s ‘capital’ and capitalism today, Routledge &Kegan Paul Ltd, London
Fusfeld, D 2002, the age of the economist, 9edn, Addison Wesley Press,
Harman, C 1995, how Marxism works, 5edn, Bookmarks Press, Sydney.
Worsley, P 2002, Marx and Marxism, revised edn, Routledge Press, London