Question

Karl Marx (5 May 1818 – 14 March 1883) was a German philosopher, economist, historian, sociologist, political theorist, journalist and socialist revolutionary.

Due to his political publications, Marx became stateless and lived in exile. His best-known titles are the 1848 pamphlet, The Communist Manifesto, and the three-volume Capital .

His political and philosophical thought had enormous influence on subsequent intellectuals, economics and politics.

Marx predicted that, like previous socio-economic systems, capitalism produced internal tensions which would lead to crisis, and concentration of power for the capitalist.

Crisis and Concentration of Economic and Political Power

Karl Marx argued that Capitalism was inherently unstable and would experience constant crises. He also argued that Capitalism would tend to generate huge differences of income and political power among the population.

a) Explain in your own words how Marx would explain Economic Crisis and Concentration of Power.

b) How this concept can help you to explain a global/local problem?

Answer 1

1)Karl Marx criticised capitalist economy with certain grounds.Capitalism is a market structure which have least government intervention.Market forces such as demand and supply determines price of goods.Karl Marx criticised capitalist mode of production.Profit motive of capitalist is a factor in reduction of real wage.Low wage creates unemployment and people won't have enough money for consumption.The under consumption creates over production or glut in the economy.This situation leads to collapse of capitalism.Proper government intervention is absent.So unregulated market forces results collapse of the economy.And also capitalism is inherently exploitative.There is always conflict between Labour and bourgeoisie.This is the situation which lead to economic crisis and collapse of market system.Power is concentrated on capitalist or bourgeoisie in capitalist system.So there is a large amount of inequality.Marx stressed these points to oppose capitalist mode of production.

2)The arguments against capitalist economic system put forward by Karl Marx has significance even today.Capitalist system has the demerits like income inequality, profit motive,no government intervention and so on.Welfare of the people has no significance in capitalist economy.So ideas of Marx helped to understand the functions of a state and importance of government.