Capitalism versus Marxism | Daily Writeups | Opinions
The following article, “Capitalism versus Marxism“, is written by Sara Khan, a student of Sir Syed Kazim Ali. Moreover, the article is written on the same pattern, taught by Sir to his students, scoring the highest marks in compulsory subjects for years. Sir Kazim has uploaded his students’ solved past paper questions so other thousands of aspirants can understand how to crack a topic or question, how to write relevantly, what coherence is, and how to include and connect ideas, opinions, and suggestions to score the maximum.
Outline
1-Introduction
2-Apprehending the concept of capitalism
3-Shedding light on the pre-requisites of Capitalism
- ✓ Capital accumulation
- ✓ Competitive markets
- ✓ Price system
- ✓ Voluntary exchange
- ✓ Private property and recognition of property rights
- ✓ Wage labor
4-Understanding the concept of “Marxism”
5-Unmasking the pre-requisites of Marxism
- ✓ Historical accumulation
- ✓ Class struggle
- ✓ Mode of production
- ✓ Dialectical materialism
- ✓ Revolutionary theory and practice
- ✓ Internationalism
- ✓ Political economy
6-Enlisting the features on which Capitalism and Marxism share common grounds
- ✓ Organized economic structure
- Evidence: Both systems highlight the importance of utilizing market mechanisms and the division of labour in enhancing economic productivity. (Research conducted by Boston University)
- ✓ Fulfill human needs and material comforts
- Evidence: The United Kingdom (UK), a capitalist economy, and the Soviet Union, a Marxist ideology from the past, are eminent examples as both focus well on fulfilling basic human necessities.
- ✓ Recognize the existence of inequality
- Evidence: According to Wikipedia, “Despite all the differences between Capitalism and Marxism, they share some commonalities while recognizing the existence of inequality.”
- ✓ Acknowledge historical development
- Evidence: As Ellen Meisksins Wood states in his book, The Origin of Capitalism, “Both capitalism and Marxism mark the transformation of society from feudalism to capitalism as an unprecedented historical development.”
- ✓ Embrace technological progress and innovation
- Evidence: Capitalism seeks technological advancement to gain profit, and Marxism admits its significance, for it empowers the working class. (Investopedia)
7-Unveiling the contrasting points between Capitalism and Marxism
- ✓ Market mechanisms
- Evidence: Capitalism is a free-market-based economic system, such as in Hong Kong and New Zealand, while Marxism is focused on fulfilling societal differences and needs, such as in Cuba. (Investopedia)
- ✓ Approach on means of production
- Evidence: As Karl Marx argues, “Social stratification results directly from the relationship individuals have with the means of production.”
- ✓ Stance on social inequality
- Evidence: According to Ohio University data, “Capitalists advocate for social inequity while Marxists are against it.”
- ✓Structure of class
- Evidence: As Marx’s conflicting view of modem society reveals, “In the struggle of classes, structure is an ingredient; it is the derivative of class struggle.”
- ✓ Impact of globalization
- Evidence: According to Cambridge University Press and Assessment article, “Capitalists are the proponents of globalization while Marxists oppose it.”
8-Critical Analysis
9-Conclusion
Answer to the Question
Human beings require plenty of systems to transform themselves into society. Initially, they developed different ways to communicate and solve their problems; with time, they felt a dire need to form proper social, political, and economic systems to govern society. At the same time, feudal culture was at its pinnacle in the world, giving rise to Capitalism – an economic system favouring the elite. In this system, market forces decide and regulate the means of production and distribution of resources, advocating the free market economy concept. Its primary focus is on generating profit out of everything; as stated by the 18th-century philosopher Adam Smith, “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their interest.” Plus, due to private ownership of the modes of production, the concentration of wealth in the hands of the elite occurs, exploiting the working class. To combat this exploitation, Karl Marx, a revolutionary economist and an opponent of Capitalism, came up with another idea, Marxism. The system advocates for the abolition of Capitalism, leading towards the creation of a classless society where means of production are owned collectively. It profoundly analyzes major economies and ideologies: Imperialism, globalization, and Communism, but it critiques Capitalism, for it is weak to the already weaker bodies. Capitalism and Marxism have many similarities; however, the former is way more different than the latter in many aspects and vice versa, including means of production and social inequality.
First, it is crucial to have an understanding of the concept of capitalism. Adam Smith developed the concept in the 16th century. It is an economic and political system in which private entities own property according to their interests, with free setting of market prices. Besides, it is also called a profit-based economic system, as individuals own monetary goods, and workers only get wages. To elaborate, the means of production and allocation of resources and distribution are regulated by market bodies of demand and supply. It is one of the famous and broadly practised economic systems around the globe, for example, in the USA. Lastly, it is undoubtedly a free-market-based economy but has pros and cons.
Moving forward, it is necessary to have a profound understanding of the concept. Manifesting it further, for a capitalist country to enjoy the true essence of Capitalism, here are some of the essentials required before establishing a prosperous capitalist state. Enlisting them, capital accumulation, competitive markets, a price system, voluntary exchange, private property and recognition of property rights, and wage labour are the prerequisites of Capitalism. Moreover, a capitalist economy can only flourish when individuals and businesses have all the rights to own and control property and the rule of law is established. Likewise, an efficient and educated workforce and a fully developed infrastructure are pivotal for thriving capitalism. Conclusively, the fulfilment of prior conditions is necessary for the establishment of true capitalism.
Regarding another concept, Marxism is also an economic and socio-political theory given by Karl Marx, an antagonist of the Capitalist system, and Friedrich Engels in the 19th century. It favours Socialism and Communism, thus leading to the foundation of multiple socialist and communist movements worldwide. It examines society through the window of class struggle. And it talks about the struggle between the bourgeoisie – a class of business owners controlling the means of production – and the proletariat, a workers class working to produce valuable economic goods; this battle defines economic relations in a capitalist economy and would inevitably lead to the revolutionary communism, Marxism. Moreover, it advocates the setting up a classless society where the means of production are owned collectively.
Understanding the underlying conditions of Marxism, it is required for further clearance. It does not have a neat list of prerequisites; it has specific terms and conditions fundamental to apprehending the Marxist perspective. Uncloaking these, historical accumulation, class struggle – the relationship and conflict between bourgeoisie and proletariat, mode of production – the categorical division of historical societies in accord with their mode of production, dialectical materialism, revolutionary theory and practice, internationalism, and political economy are significant for grasping Marxist ideology at once. In addition, Marxism focuses on critically analyzing capitalism, so understanding the dynamics of capitalism is also required. To summarize, having an understanding of the characteristics of Marxism is essential.
Talking about some features on which both the systems share commonalities is necessary. In the first place, both systems talk about organized economic structures; they realize their importance and, therefore, emphasize it. One such Capitalist country in recent times is Australia. Besides, both systems use market mechanisms for the allocation and distribution of goods and services, and both endorse the concept of division of labour, for it is crucial to enhance economic productivity, proving it as the best economic driver, as stated in the research conducted by Boston University. Long story short, the Capitalist and Marxist theories shed light on the importance of labour division and the utilization of market mechanisms.
Further, both systems exchange similar approaches to fulfilling basic human needs and material comforts. These systems aim to provide fundamental human needs such as healthcare, food, shelter, and education. In capitalism, access to these necessities is determined by the consumer parity interindividual purchasing power dividual. They also talk about the significance of maintaining living standards to boost social well-being. For example, the UK, being a capitalist economy, and the Soviet Union, a Marxist ideology from the past, are eminent examples in this regard. It means both emphasize heightening up material comforts for individuals in society. Therefore, capitalism and Marxism are alike in their mantra of providing basic needs to humans.
Additionally, both ideologies acknowledge the presence of inequality within society. Capitalism discerns its existence in wealth, income, and opportunities among individuals and groups. Similarly, Marxism also recognizes the existence of disparity prevailing in a society due to capitalists. Wikipedia data estimates that despite all the differences between Capitalism and Marxism, they share some commonalities while recognizing the existence of inequality. Moreover, Marxists admit that inequity resides in two classes: the bourgeoisie and the proletariat. It means the elite ruling class exploits the working class, creating a massive gap in society in the form of the upper class and lower class. To conclude, both ideologies exchange similar discourse by admitting that inequality is present in a society in different ways.
Moreover, both systems are materialist in their historical perspectives, as economic, social, and material factors drive historical development. They acknowledge that dynamic methods of production and social organizations have profound repercussions on societal development. Both capitalism and Marxism hold the same belief in recognizing that societies in the development phase go through different stages or levels, welcoming them with new structures on all fronts. As Ellen Meisksins Wood, inhis book “The Origin of Capitalism”, stated, capitalism and Marxism mark the transformation of society from feudalism to capitalism as an unprecedented historical development. Hence, both systems advocate the importance of historical development.
Augmenting further, both ideologies share similar discourses on the significance of technological upliftment and innovation; this is important for economic development and boosting productivity and living standards. The data on Investopedia reveals that Capitalism seeks technological advancement to gain profits, and Marxism admits its significance, for it empowers the wagers. Capitalism beholds it as a tool to achieve growth and earn profit. And Marxism refers to the importance of technological advancement as the route for gaining well for the working class and as a means for enhancing their living conditions. To cap it all, both systems know the importance of technological progress and innovation.
Jumping on the distinctive points between both systems, Capitalism and Marxism diverge at various contrasting points, drawing a clear line between the two ideologies. Some of these are unveiled below. Capitalism is a free-market-based economic system – a market in which the law of supply and demand controls or regulates production and labour, with little or no intrusion of government. Hong Kong, New Zealand, and the United Kingdom (UK) are examples of a free-market economy. In the capitalist economic system, the market determines the price to profit from. The division of labour occurs based on specialization and efficiency to focus on particular profitable goods.Contrarily, in Marxism, the function of markets is different: goods are distributed according to need, not based on paying ability. Moreover, the Marxist division of labour is based on fulfilling societal needs to halt class differences altogether. Countries that claimed to be influenced by it are China and Cuba. Briefly, the role of the market is different in both systems.
Furthermore, both systems are distinctive, mainly in their approach to the means of production. In capitalism, individuals or corporations privately own the means of production, and market forces control and manage them, referring to decentralization. It means the ruling class, the capitalist, influences it. Conversely, Marxism talks about the collective ownership of the means of production, favouring the working class, which means the centralization of ownership directed by the state. Marxism is against the capitalist’ view of it, for it leads towards social imbalance. As Karl Marx argues, “Social stratification results directly from the relationship individuals have with the means of production.” In a nutshell, both capitalism and Marxism are different in their approach to the means of production
Next, another contrasting point of both ideologies is the stance on social inequality. Capitalism, a system advocating the ruling class, is a supporter of individual say, and it advocates for a clear-cut difference that should exist between individuals and groups. Market forces would decide the distribution of wealth and resources within a society, waging the workers. On the other hand, Marxists consider it the exploitation of the working class; according to them, since the elites would use and spread the resources, they are exploiting the wagers’ income and opportunities, heightening the probability of a surge in social unrest and economic disparity. It is also evident from Ohio University’s data claiming that Capitalists advocate for social inequity while Marxists are against it. Ostensibly, Marxism is against capitalism, for it encourages societal discrimination. Hence, both systems stand on different poles of social inequality.
Jumping on another diverging point between concepts, capitalism and Marxism are way more different in categorizing classes and class structure. In the former’s system, three classes are determined based on economic criteria: wealth and income. They divide society into three classes: the Bourgeoisie – the elite class or capitalists, who own the production of means – the working class, who sell themselves for wages; and the middle class, who are managers or professionals. Further, class mobility is possible due to certain factors. Nevertheless, Marxism defined class structure based on the relations to the means of production, which means property governed the classes. As Marx’s conflict view of modern society reveals, structure is an ingredient in the struggle of classes; it is the derivative of class struggle. Marxists divide society into three classes: Bourgeoisie – the ruling class; Proletariat – the workers; and landowners, whose income is rent; class mobility is impossible. Thus, both diverge at the point of class structure.
Finally, yet importantly, capitalism and Marxism share contradictions in their view regarding the impact of globalization. Capitalists argue that globalization is a primary driver of economic growth; it furthers efficiency and prospers the economy. Besides, it increases competition among groups by providing easy access to markets and opportunities for trade, technological innovations, and investment, eventually benefitting the global south and north. In contrast, Marx’s perspective is different. The data published in the Cambridge University Press and Assessment article describes that Capitalists are the proponents of globalization, while Marxists oppose it. Marxists say that globalization serves only the elites and multinational companies, exploiting cheap labour and local economies, thus aggravating inequality, hurting national sovereignty, and questioning democratic governance. In summary, capitalism and Marxism see the impact of globalization distinctively.
After all this discussion, the meticulous analysis reveals that although capitalism and Marxism are socio-economic concepts and share some common grounds, they cannot fulfil various needs. Despite being top-notch ideologies, they fail to serve people. To illustrate, capitalists talk only about profit; they serve the elites, disregarding the working class. Conversely, Marxism speaks about the working class but does not consider profit, undermining economic growth and prosperity. To boot, the Marxist’s view is more like a myth rather than reality, and it is not applicable in the contemporary dynamic era as it talks about toppling down the elites and establishing a classless society, which is not possible in recent times.
Bringing down the curtains, both capitalism and Marxism are socio-political, particularly economic concepts. They have similar perspectives on some points; however, both are poles apart in their approaches to the means of production, social inequality, and structure of classes. To elaborate, capitalism divides society into three classes, while Marxism divides it into mainly two classes. Capitalists favour globalization, and Marxists are against it, for they consider globalization a means of labour exploitation, leading to economic degradation. Adding to it, both recognize the need for human needs and access to fundamental necessities, and they also consider the significance of technological advancements and innovations but are distinctive in their approach.
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