Definition
Marxism, although not exclusive to finance, is a socio-economic theory proposed by Karl Marx and Friedrich Engels. It asserts that societal and economic problems arise from class struggles and the exploitation of the working class by the bourgeoisie in capitalist societies. In the context of finance, it criticizes capital accumulation, predatory lending, and economic inequality among different social classes.
Key Takeaways
- Marxism is a social, political, and economic theory originated by Karl Marx, which focuses on the struggle between capitalists and the working class.
- Marxism asserts that the exploitation of the working class must end, proposing a society where the workers, not the bourgeoisie, own and control the means of production.
- Marxist economic theories have been the foundation for various political movements with the central argument that wealth and power should be shared equitably within a society.
Importance
Marxism is an important term in finance because it represents a socio-economic theory that proposes the redistribution of wealth and the abolishment of private property and capitalism.
Marxism was developed by Karl Marx and Friedrich Engels, asserting that social change and economic disparity are propelled by the conflict between the capitalist class, who control the means of production, and the working class, who provide the labor.
It advocates for a society where all property is publicly owned, and each person works and is paid according to their needs and abilities.
Understanding Marxism is crucial as it has greatly influenced global economic and political structures throughout history.
Whether one agrees or disagrees with its principles, it brings to light the concept of financial inequality, a recurring issue in economies worldwide.
Explanation
Marxism is not a finance term per se, but a social, economic, and political philosophy or worldview named after Karl Marx. It offers a critique of capitalism and presents an alternative structure, premised on the belief that societies progress through class struggle — a conflict between an ownership class that controls production and a disenfranchised working class that provides the labor for production.
The primary purpose of Marxism is to provide a theoretical framework for societies in which all property is publicly owned, and each person works and is paid according to their abilities and needs. Marxism advocates for the proletariat, or working class, and stresses the importance of classism and how economic systems can influence social structures.
It seeks to rectify perceived injustices by proposing profound societal change to eradicate the exploitation of workers. The Marxist theory is employed as an interpretive method across various disciplines, understanding and critiquing societal structures in a bid to catalyze change towards what Marxists see as an egalitarian society where wealth, resources, and power are distributed equitably.
Examples of Marxism
Cuba: Since the Cuban Revolution in 1959, Cuba has been a nation built on Marxist principles. Fidel Castro’s regime nationalized industries and services in an effort to establish equality and eliminate capitalism. Notably, Cuba’s healthcare and education systems are both state-run and free to the public.
Soviet Union: The Soviet Union was one of the most prominent examples of Marxism in the 20th century. Following the Bolshevik Revolution in 1917, Vladimir Lenin and his successors aimed to eliminate social classes and distribute wealth equally. Industries were collectively owned and the government planned the economy.
People’s Republic of China: China under Mao Zedong became a Marxist state in 1949 through a revolution. The state took control of all assets and resources for centralized planning and distribution. Despite significant economic reforms in recent times to included market-based mechanisms, the Chinese Communist Party maintains it still follows Marxist principles. It’s important to note that many would argue these examples represent more totalitarian or even authoritarian applications of Marxism rather than the ideals theoretically posited by Karl Marx.
FAQs about Marxism
What is Marxism?
Marxism is a socio-economic theory proposed by Karl Marx and Friedrich Engels, central to which is a critique of capitalism. It states that society’s class struggle is a political means of changing societies and overthrowing capitalism.
Who proposed Marxism?
Marxism was proposed by two philosophers, Karl Marx and Friedrich Engels, in the 19th century.
What is the central focus of Marxism?
The central focus of Marxism is the struggle between social classes, particularly, the proletariat (working class) and bourgeois (owners). Marxists believe this struggle will ultimately lead to a revolution and establish a classless society.
What is the relationship between Marxism and communism?
Marxism serves as the theoretical foundation for communism. They are closely linked, though distinct, with communism often viewed as the political practice of Marxism’s theoretical propositions. Both envision a classless society where wealth is owned and distributed equally.
How does Marxism critique capitalism?
Marxism critiques capitalism for being an exploitative economic system. Marxists argue that capitalism benefits the owners of capital, who profit off the labor of working classes, leading to class struggle and ultimately, to the need for a revolution.
Related Entrepreneurship Terms
- Proletariat
- Bourgeoisie
- Means of Production
- Class Struggle
- Surplus Value
Sources for More Information
- Marxists Internet Archive: A comprehensive, free-to-access database of Marxist writings and related works.
- Encyclopedia Britannica: A well-established, authoritative source of information on a wide range of topics, including Marxism.
- Internet Encyclopedia of Philosophy: A peer-reviewed academic resource on a wide range of philosophical topics, including Marxism.
- JSTOR: A digital library for scholars, researchers, and students. JSTOR is a highly respected resource that archives and provides access to various scholarly articles and papers, archive journals, books, and other materials on various subjects including Marxism.
