Discussions on Great Economic Thinkers - Essay Example

Micro and Macro Economics: Discussions on Great Economic Thinkers Discussions on Economic Thoughts of Marl Marx Personal history and concerns Karl Marx was a German philosopher, economist and journalist who lived between 1818 and 1883. He came from a wealthy middle class family and started his revolutionary life early in his career as a journalist where as early 1840s he had started to write controversial articles in newspapers in Germany. Marx was born at a time when the aristocrats ruled the world and capitalism was deeply rooted in most countries. Labourers were oppressed by working for long hours with little pay. These issues concerned Marx in his early life and he started being a critic of the status quo. He started developing the ‘dialectical materialism’ which addresses the economic order efficiency and its inherent weaknesses and contractions that lead to its own decay/ collapse. The concept attempted to critic capitalism tenets and prediction of its own collapse. His constant revolt against the current rulers saw him exiled in Belguim, France and Britain where he eventually died in London (Heilbroner, 136 - 139). Economic Ideas and concepts Karl Marx is often referred to as the father of Socialism and Communism owing to his Marxist theories and The Communist Manifesto. He was a critique of capitalism which dominating Europe by them after overthrowing feudalism. According to Marx, current tenets of capitalism were not sustainable as they had little regard for laborers who are important in the production process. While critiquing the capitalism, Marx argued that while capitalism was revolutionary, industrializing and driven by universal qualities of development, it exploited and alienated laborer resulting to high unemployment rate. As a result, the system was subjects to depression shocks and the exploitation led to suffering of most laborer. These conditions were the recipes that would lead to class struggle, system decay and eventual collapse of capitalism. In essence therefore, what Marx was suggesting is a form of production process that would give decency to the working class. Such a method of production would be socialism or what is referred to as inexorable system of Karl Marx’ (Heilbroner 167). His assertions make sense when viewed in the light of modern capitalism as modern practices have come to recognize the importance of labor as a factor of production. Most companies are concerned about the welfare of their staff where business objectives are being driven by triple bottom line. Such an approach will most likely reduce tension between owners of capital and laborers. Karl Marx also contributed immensely to labor relations and industrial actions. He viewed the society as comprising of two classes i.e. the owners of capital and laborers who provided labor. According to him there exists a class struggle as each wants to maximize from each other. Unfortunately, the owners of capital who often forms part of the ruling class oppress the workers through long working hours and poor pay. Given the power of the ruling class and increased population, are able to maximize value at the expense of the laborers. Welfare of the workers is not a priority, maximizing surplus value and profit is. Heilbroner (32) noted that the English ruling class ‘failed to understand what fluid and mobile labour force would seek to achieve’. According to Marx, Capitalists optimize the discrepancy between labor markets and produce market to make surplus value. Surplus value is realized when input costs are lower than output price and the surplus according to Marx is taken away from laborer due the imbalance. The surplus value arises from unpaid work as they are only paid enough to keep the body and soul together i.e. to make laborers survive. He noted that in the long run as class struggle continues, the surplus value reduces considerably a situation which forces the owners of capital to rescue their capital. In labor relations, the argument makes sense in that most laborers will go on strike whenever they feel that their contribution is not being compensated as it is supposed to. Labor theorists and practitioners can therefore borrow from Marxism to establish equilibrium between labor costs and revenue from outputs. In addition, labor laws can be designed to avoid most of the tensions brought about by the disequilibrium in labor relation. There is also need to focus on workers welfare are unrest can be destructive to owners of capital. Marx notes that laborers should not relent to as for better working condition since even in revolt, they have nothing to lose other than their chains and a whole world to win (Heilbroner 136). However, he acknowledges that laborers are only entitled to an equivalent of their labor power. Marx also contributed to production process where he predicted the collapse of capitalism arising from its own decay. He predicted that proletariats would form the next ruling class and urged them not to be short sighted (Heilbroner 159). A closer look at this prediction has seen Marx come under heavy attack as the country is yet to fully witness a fully proletariat government. While capitalism lost ground to communism in Soviet Union, China, East Germany and other Asian countries, the elite still dominated the politics of the state. Nonetheless, his tenets of communism had a big impact in modeling the modes of production in most countries. In addition, era of cold war and reintroduction of capitalism in Eastern Europe and Asia shows that capitalism can work if only its evils are addressed. Failure to do so would only perpetuate the state of anarchy as workers feel alienated and engage in a struggle to reclaim what is denied by the ruling class and owners of capital. Marx contributed to communism, equity and private ownership of property laws. According to Marx, land should be communally owned and rent paid for those using it for public purposes. Communism also supports centralization of production in the hands of the state. In so doing credit provision, free education of all children in public school would help in establishing equity in society. The assertion stems from Marx’s view that capitalism perpetuates inequality in society since ownership of means of production is in the hands of few ruling elite and aristocrats who oppress the masses. Through communism, a new social order is created where members of a state compete favorably and opportunities are available equally to everyone. However, communism as put across by Marx has been criticized that it will result into law labour output as there is no incentive work. While this is true to some extent, views from other Economist like Adam Smith and Ricardo shows that when labor is free in terms of movements, then it can be engaged in areas where it can realize its full potential. In conclusion, it worth noting that while most of the tenets that Marx put across have not been realized fully globally, his work has influenced and contributed to various works of various scholars in Philosophy, Economics and Law. Its greatest contribution is in checking the excesses of capitalism which would have resulted in the predicted collapse. In addition, the resolve to strive for the best reward for laborers has brought sanity and dignity to workers, workplaces and mankind. The ability of proletariats to rule is however difficult given that some are not united and myopic. The ability of the owners of the means of production to thwart efforts of the proletariats to occupy leadership positions makes it difficult. Therefore, laborers should remain united to have a least a simple majority in leadership as they would help to influence policies. Work Cited Heilbroner, Robert. The Worldly Philosophers: The Live, Times and Ideas of the great Economic Thinkers. 7th ed. New York: Touchstone Publishers Read More