The Marxist Perspective

Marxism characterizes capitalism as the private ownership of the means of production and the existence of wage labor. Capitalism is characterized by 2 things that are responsible for its dynamic nature and which make it the most productive mechanism 1. capitalism is driven by capitalists striving for profits and capital accumulation in a competitive market economy 2. labor has been dispossessed and has become a commodity that is subject to the price mechanism The historical mission of capitalism is to develop and unity the globe, but its very success will hasten its passing.
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According to Marx (1818-1883), the origin, evolution, and eventual demise of the capitalist mode of production are governed by 3 inevitable economic laws The law of disproportionality. A tendency toward an equilibrium does not exist; the recurring disproportionality between production (overproduction) and consumption (under consumption) due to the "anarchy" of the market causes periodic depressions and economic fluctuations These recurring economic crises will become severe and in time the suffering proletariat will rebel against the system. The law of the concentration. The drive for profits and the necessity for the individual capitalist to accumulate and invest leads to increasing concentrations of wealth in the hands of the efficient few and the growing impoverishment of the many The capitalist society becomes ripe for social revolution as the number of the impoverished proletariat and the unemployed 3 increase, and the labors wages decline.

3. The law of the falling rate of profit. = As capitalists increase efficiency and productivity through investment in new labor-saving and more productive technology, the level of unemployment increases and the rate of profit or surplus value decreases In time, the ever-increasing intensity and severity of the downturns in the business cycle will cause the workers to rebel and destroy the capitalist economic system. The core of the Marxist critique of capitalism is that although the individual capitalist is rational, the capitalist system itself is irrational. The inherent contradiction of capitalism is that with capital accumulation, capitalism sows the seeds of its own destruction and is replaced by the socialist economic system .
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 Marx didnt elaborate a theory of imperialism. Most of the clues to the communist theory of imperialism in this century were provided by the English economist John A. Hobson (1858-1940). Hobson argued that in capitalist systems, a wealthy minority over-saves while a impoverished or "bare subsistence" majority lacks the purchasing power to consume all the fruits of modern industry. =>Capitalist societies are faced with the critical dilemma of overproduction and under-consumption. If capitalists were willing to redistribute their surplus wealth in the form of domestic welfare measures, there would be no serious structural problem. However, the capitalists seek instead to reinvest their surplus capital in profit making ventures abroad. The result is imperialism
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 Lenin (1870-1924) converted Marxism from essentially a theory of domestic economy to a theory of international political relations among capitalist states. Lenin wanted to account for the persistence of nationalism, to show why the socialist parties of several Western European powers had supported their respective bourgeoisies and to explain why the impoverishment of the proletariat had not taken place. According to Lenin, a capitalist international economy does develop the world but it does not develop it evenly => Lenin added a 4th law to the original 3 Marxists laws of capitalism
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4. The law of the uneven growth. = As capitalist economies mature, as capital accumulates, and as profit rates fall, the capitalists economies seize colonies and create dependencies to serve as markets, investment outlets, and sources of food and raw materials. In competition with one another, they divide up the colonial world in accordance with their strengths. As other capitalist economies advance, they seek a redivision of colonies =>This imperialist conflict inevitably leads to armed conflict among the rising and declining imperial powers. The WWI, according to this analysis, was a war of territorial re-division between a declining Great Britain and other rising capitalist powers. 7

Basic tenets of the Marxist perspective. 1. The State is the most important actor in the system. 2. The State acts rationally to maximize self-interest. 3. The State is nothing more than an agent acting at the behest of the dominant class- in capitalism, the bourgeoise = The relationship among classes is the main factor affecting the economic and political order. 4. The international system is hierarchical.
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The nature and purpose of international economic relations Marxists view economic relations as being basically conflictual and zero-sum in nature Marx and Engels argue: one fact is common to all past ages, the exploitation of one part of society by the other Under-development theorists (structuralists or dependency theorists) argue that the world is hierarchically organized, with the leading capitalist states in the core of the global economy (advanced industrial countries) dominating and exploiting poor states in the periphery (less-developed countries) = only the core states can make autonomous choices about domestic and foreign economic policies, and market mechanisms simply reinforce socioeconomic and political inequalities. 9

The relationship between politics and economics Marx viewed politics as being subordinate to economics a. formal government institutions respond in a rather passive manner to socioeconomic pressures b. a states policies reflect the interests of the capitalist class.

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