Marx’s Theory Predictions
Karl Marx theory on economics predicts that accumulation of profits leads to their reinvestment leading to an increase in the total capital. In this case, capital is the asset value that seeks to multiply itself in order to produce surplus value (Moseley 1995: 92). This in the long run will translate to an increase in any business venture. Those that have will increasingly accumulate wealth and capital whereas those who don’t have will not have therefore sustaining the status quo.
In his perspective, the free market will diminish and in its place, there will be an increased concentration of capital amongst a few people and corporations. That profits must be made at all costs as this is the labor power that determines whether a business will grow or not and this solely depends on the law of forever increasing the capital concentration (Hale 2010: 186). This in the bigger picture affects the global economy as a whole. The multinational companies seek to get cheap labor from regions that offer it as they concentrate of increasing their profit margins.
Capitalism can be looked at by use of an economy like Canada. Concentration of capital has gone up by the numbers especially in the multinational corporations. They make up half of the country’s economy by the use of the class culture whereby the rich, who are regarded as the ones occupying the highest class of social stratification continuously get rich where as the middle and low class still survive on the little that they have (Hale 2010: 184). This is evident when the shareholders in these multimillion companies are becoming super rich.
The logic of capitalism is at work not only in Canada but also in other economies of the world. This in the long run will lead to the loss of communalism, where persons can share the resources in equal measure. The rural- urban debate too takes centre stage because this leads to a high cost of living for those moving to urban places as their earnings will not sustain their livelihoods. For this and other reasons, the social classes are maintained where the rich continuously get rich while the poor continue being poor.
References
Hale, S. (2010). Contested Sociology: Rethinking Canadian Experience. Toronto: Pearson
Moseley, F. (1995). Heterodox Economic Theories: True or False. Brookfield: Edward Elgar Publishing Company
