Marxism

Definition

Marxism is a social, political, and economic theory originated by Karl Marx, which focuses on the struggle between capitalists and the working class. It posits that societal change comes about through economic class struggle and maintains that capitalism will inevitably self-destruct to be replaced by socialism. This theory also proposes the abolition of private property, public ownership of the means of production (industry), and the end of class society.

Phonetic

The phonetic spelling for “Marxism” is /ˈmɑːrksɪzəm/.

Key Takeaways

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Economic Determinism: Marxism is predicated upon the idea of economic determinism. According to this theory, the economic order shapes all other aspects of society. The ownership and control of the means of production strongly influence societal structure.
Class Struggle: Marxism posits that societies progress through a struggle between the ruling class, which controls the means of production, and the working class. This struggle is a driving force behind societal change, potentially culminating in a revolution.
Abolition of Capitalism: The Marxist theory ultimately advocates for the abolition of capitalism. It suggests that a socialist or communist society, where the means of production are communally owned, can eliminate the class disparities and social inequalities found under a capitalist system.

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Importance

Marxism is a critical term in business and finance because it proposes alternative viewpoints and methodologies for understanding economies, placing emphasis on social relationships and labor dynamics. Founded by Karl Marx and Friedrich Engels, Marxism theorizes that societal conflicts arise from the inequality inherent in capitalism, where the bourgeoisie (owners of the means of production) exploit the proletariat (workers), leading to a class struggle. This concept underscores the need for societal change through revolution, advocating for the development into a socialist and eventually communist system where wealth and power are equitably distributed. Understanding Marxism is critical to comprehend various economic viewpoints and frameworks, providing depth to discussions on economics, capitalism, and social inequality. It also helps to contrast and challenge capitalistic systems, facilitating richer analyses and stimulating potential advancements in socio-economic structures.

Explanation

Marxism is fundamentally a school of thought in economics, politics, and sociology that emphasizes the role of class struggle and social inequality in societies. Established by Karl Marx and Friedrich Engels in the 19th Century, Marxism posits that socioeconomic progress is driven by class conflicts, particularly between the proletariat (working class) who do not own means of production, and the bourgeoisie (capitalist class) who own and control them. The ultimate purpose of Marxism is to analyze and interpret the world in order to understand these class struggles, and consequently, to motivate and inform political and social change towards a classless society.Marxist principles serve as the basis for economic policies in several socialist and communist societies, with the goal of creating a socio-economic landscape characterized by equal distribution of wealth and absence of class hierarchy. Marxism aims to end the exploitation of the proletariat by the bourgeoisie, advocating for the social ownership of the means of production. Hence, factories, agricultural land and other productive assets should not be under private control but owned collectively by the community or workers. Marxists envision a society wherein work is not just a means for survival but also a way to fulfill one’s potential and contribute to the common welfare, underlining the need for a revolution to transition from capitalism to socialism.

Examples

1. China: Known as one of the significant examples of countries following Marxist theories, it has a centrally planned and controlled economy where the government owns all the assets and production capabilities with an aim to eradicate social and economic class structure. However, China in recent years has allowed elements of capitalism, such as entrepreneurship and private companies, into its economy while still maintaining the strong throes of socialism and Marxism.2. The former Soviet Union: Before its collapse, the USSR operated fully on Marxist principles under a socialist planned economy where resources were controlled, and jobs were assigned by the government. It aimed for each person to receive according to their needs and work as per their abilities. 3. Cuba: Post the Cuban revolution, Fidel Castro introduced a Marxist-Leninist government with a centrally planned economy. Major industries were nationalized, and wealth was supposed to be redistributed to solve inequality problems. It’s critical to note that these examples denote Marxist economic models or systems, not to be confused with the philosophy or the social and political elements of Marxism, which would focus on class struggle and social dynamics.

Frequently Asked Questions(FAQ)

What is Marxism?

Marxism is a social, political, and economic theory developed by Karl Marx and Friedrich Engels. It criticizes capitalism, suggesting an alternative society where the means of production are owned by workers.

Who developed Marxism?

Marxism was developed by Karl Marx and Friedrich Engels in the mid-19th century.

What are the core principles of Marxism?

The core principles of Marxism include the belief in a classless society, the understanding that labor is the source of all value, and the idea that capitalism is inherently exploitative and will eventually lead to a revolution.

How does Marxism understand and interpret history?

Marxism interprets history through the lens of materialistic interpretations and views historical progress as a struggle of classes, primarily between the bourgeoisie and proletariat.

What is the relationship between Marxism and communism?

Marxism is often considered a stepping stone to communism. The ultimate goal of Marxism, as developed by Marx and Engels, is a communist society where every individual contributes and receives according to their abilities and needs.

What does Marxism say about economics?

Marxism asserts that the capitalist economic system leads to an unequal distribution of wealth and power. It advocates for an economy where the means of production – the facilities, resources, and tools used to produce goods and services – are owned collectively by the workers.

How does Marxism view capitalism?

Marxism asserts that capitalism is exploitative, as it perceives capitalists obtaining profits from the surplus value produced by workers, without adequately compensating them.

Is Marxism only about economics?

No. While economics play a significant role in Marxist theory, it extends beyond economics to address issues of societal structure, politics, and history. Marxism also has significant impact on philosophy, literature, and the arts.

How does Marxism influence modern society?

Marxism has influenced numerous movements and political regimes all over the world, and remains a substantial theoretical approach within social sciences. Elements of Marxist theory can be found in policies focused on social equality and collective ownership.

Why is Marxism criticized?

Criticisms of Marxism often pertain to its practical implementation, with critics stating that attempts to apply Marxist principles in real world scenarios (such as the Soviet Union or Cuba) have led to totalitarian regimes and economic inefficiency. Others criticize its simplistic understanding of class structure and its prediction of inevitable class conflict.

Related Finance Terms

Proletariat
Bourgeoisie
Means of Production
Class Struggle
Communism

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