Relevance of Marxism to Todays Economy - Essay Example

Marx views history as heading inevitably toward an actual conflict between the classes. He maintains in Capital, that capitalism is structurally defined in such a way that it will implode on itself – it is structurally determined to self-destruct. At this point in Marx's theory, he goes from a 'descriptive' approach to economics to a 'prescriptive' one. It will be argued that the value of Marx in a contemporary context is his descriptive rather than his prescriptive side. His prescriptive solution which is communism challenges some of the most basic assumptions about equality and human rights. Toward a critique of this 'prescriptive' side of Marx, this analysis will close with some of the key criticisms of Marx leveled by the economist, and philosopher of history and science, Karl Popper in his work titled: The Open Society and its Enemies. Thus, while the descriptive side of Marx allows us to understand the nature of 'profit' and its role in creating and perpetuating exploitive relations, his prescription or solution to this situation will be presented as fundamentally limited.

Without question, the developed or G7 nations are moving toward more open markets or ‘freer trade’. In Europe, both the common currency and the EEC are an example of this movement, and in North America, this is exemplified both in the North American Free Trade Agreement, but also the more recent push toward establishing the Multi-lateral Agreement on Investment [Moody, 117ff]. In general, the acceptance and legitimation of these policies are premised on the idea that less ‘regulation’ and less government involvement with the movement and investment of capital, will stimulate the economy and in turn, create more employment. It is argued that since the mid to late 1970s, there has been a decline in the acceptance of Keynesian economics, a theory that maintains that the government should put money directly into the hands of individuals as a means of stimulating growth. By contrast, it is now ‘accepted’ practice that government intervention is an inadequate means of stimulating this forth of economic growth, and the following will explore, both the nature of the notion of free trade for job growth, but more importantly, focus on the ‘type’ of jobs which are being created. It will be argued that as with any form of market economy, the relationship surrounding the means of production is the determining factor concerning the ‘control’ of capital, and in turn, free trade merely entails a greater polarization between those on either side of this relationship surrounding the means of production. It is the relationship surrounding the means of production that makes Marx's Capital still relevant.

One of the motivating factors for ‘free trade’, and especially in the context of North America, is the aim of improving the cost efficiency of both production and distribution. This is especially true in the area of manufacturing and is documented by some scholars, that the move to free trade is similarly and increasingly associated with service sector forms of employment [Goldstein, 50]. In basic Marxist terms, the relationship surrounding the means of production entails that some must sell their labor, and those in the position of purchasing labor – a distinction between the proletariat and the owning class [Marx, 19]. Profit, Marx argues, is the difference between the cost of production in terms of the surplus value of labor [Marx, 207], and in turn, the market value of ‘object’ or commodity being sold. Free trade is desired largely because of the cheaper labor costs, and thus, those regions where high unemployment exists, where there is a low amount of union organization, and where there are lower costs in terms of safety or environmental concerns, are the regions where higher surplus labor can be ascertained. As is documented by Moody (1995, 126ff), NAFTA has created much employment in the area of manufacturing in Mexico, and for the above reasons.  However, it is being argued that there are problems with the quality of employment being created, and second, while free trade has entailed an increase in employment in some regions, there is a corresponding loss of employment in other regions – those regions with higher labor and production costs.

Although employment is stimulated by free trade, as is indicated in the quote in the business week, at the same time, the growth rate has not been very significant.  The core reason for this is the increase in automation in the workplace. The greater the dependence and use of automation in the tasks associated with manufacturing, the less the need for workers. For example, Moody (1995, 129) points to a 17 % decline in jobs at a particular Mexican automotive plant in the period extending between 1982 and 1990. The decline in employment there is directly related to the greater degree of automation, which has further problems associated with the basic notions of ‘alienation’.

In sum, free trade has a more positive impact on the owning class than those at the bottom of the socio-economic scale. Although there is job growth associated with free trade, the quality of the employment being created must be considered on the one hand, and on the other hand, the effects of automation on the actual rates of growth must also be a central consideration.