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Karl Marx Theory of Economic Development

Karl Marx was a German philosopher and economist who is regarded as the father of modern socialism and communism. He developed a theory of economic development that included assumptions that society is divided into two classes, the bourgeoisie and proletariat, and that capitalism inevitably leads to conflict between these classes and its own demise as profits fall and socialism emerges. Marx believed that under capitalism, economic growth occurs through the accumulation of capital and technological improvements but eventually reaches a peak, concentration of capital falls and class conflicts increase, ultimately leading to the downfall of capitalism.

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453 views14 pages

Karl Marx Theory of Economic Development

Karl Marx was a German philosopher and economist who is regarded as the father of modern socialism and communism. He developed a theory of economic development that included assumptions that society is divided into two classes, the bourgeoisie and proletariat, and that capitalism inevitably leads to conflict between these classes and its own demise as profits fall and socialism emerges. Marx believed that under capitalism, economic growth occurs through the accumulation of capital and technological improvements but eventually reaches a peak, concentration of capital falls and class conflicts increase, ultimately leading to the downfall of capitalism.

Uploaded by

Mac Macapil
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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KARL MARX THEORY OF

ECONOMIC DEVELOPMENT

FROILAN JAN S. MACAPIL


Karl Heinrich Marx, FRSA

A German philosopher, economist, historian,


sociologist, political theorist, journalist, critic of
political economy, and socialist revolutionary.
His best-known titles are the 1848 pamphlet
The Communist Manifesto and the four-volume
Das Kapital.

Born: May 5, 1818, Trier, Germany

Died: March 14, 1883, London, United Kingdom


He is regarded as the father of history who
prophesied the decline of capitalism and the
advent of socialism.
He expected capitalistic change to break
down because of sociological reasons and
not due to economic stagnation and only
after a very high degree of development is
attained.
Marxian economic theory of growth is based
on certain assumptions:
1. There are two principal classes in the society.
Bourgeoisie - the people who control the means of production in a
capitalist society
Proletatiat - the members of the working class

2. Wages of the workers are determined at subsistence level of


living.
3. Labour theory of value holds good. Thus labour is the main
source of value generation.

4. Factors of production are owned by the capitalists.

5. Capital is of two types: constant capital and variable capital.

Constant capital is the value of goods and materials required to


produce a commodity, while variable capital is the wages paid for
the production of a commodity.

6. Capitalists exploit the workers.


7. Labour is homogenous and perfectly mobile.
- all workers have identical skills and abilities, and can transfer
between jobs easily

8. Perfect competition in the economy.


-Farmers' markets: The average farmers' market is perhaps the
closest real-life example to perfect competition

9. National income is distributed in terms of wages and profits.

*This is the period of the industrial revolution in Europe


In Marxian theory, production means the generation of value. Thus economic
development is the process of more value generating, labour generates
value. But high level of production is possible through more and more capital
accumulation and technological improvement.

At the start, growth under capitalism, generation of value and accumulation


of capital underwent at a high rate.

After reaching its peak, there is a concentration of capital associated with


falling rate of profit. In turn, it reduces the rate of investment and as such
rate of economic growth. Unemployment increases.

Class conflicts increase. Labour conflicts start and there is class revolts.
Ultimately, there is a downfall of capitalism and rise of socialism.
Source: Google
The industrial Revolution saw the issue of Public Health become a matter at
the heart of government policy.

A rising population coupled with poor housing and long working hours, led to
conditions in urban areas becoming atrocious.

Slums quickly grew as cities bore the weight of the rapid increase in people.
Diseases wreaked havoc.

https://schoolshistory.org.uk/topics/medicine-through-time/public-health-in-the-industrial-revolution/
Social Origins of Dictatorship and
Democracy: Lord and Peasant in the
Making of the Modern World

by Barrington Moore, Jr.


Social Origins of Dictatorship and
Democracy
BARRINGTON MOORE JR.

Reporter:
FROILAN JAN S. MACAPIL
He is an American political
sociologist, well-known for his
Social Origins of Dictatorship
and Democracy (1966)

Moore's groundbreaking work


was the cornerstone to what is
now called comparative
historical analysis in the social
sciences.
"no bourgeois, no democracy"
Moore's concern was the transformation of pre-industrial agrarian
social relations into "modern" ones. He highlighted what he called
"three routes to the modern world" - the liberal democratic, the
fascist, and the communist - each deriving from the timing of
industrialization and the social structure at the time of transition.

Moore challenged modernization theory by stressing that there was


not one path to the modern world and that economic development did
not always bring about democracy.
In short and simple language

His core thesis is that in each country, the


relationship between the landlord class and the
peasants was a primary influence on the ultimate
form of government the society arrived at upon
arrival in its modern age.

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