Introduction
One of the elements in the society that has a huge influence on the economy is politics. Studies related to international political economy seek to find out how politics influences the political and economic relations between nations and within nations. In a nutshell, economic relations refers to the selling and buying off goods and services, investment flow, the poverty and wealth of nations and regions and other related aspects. International political economy seeks to answer questions such as the proper role of governance in the economy. It explores the policies that can be constructed to induce economic prosperity in the nation and make it generally wealthy. It explores the relationship between society’s wealth and its attitude towards the government. Another major question that the discipline of international political economy seeks to answer is the extent to which the government should be involved in order to facilitate economic growth, for example, is deep involvement of the government key to economic growth or does the government need to excuse itself from some areas to let them flow naturally and in the process stimulate economic growth? Over the years, several theories of international political economy have been advanced to try and answer these questions. The Marxist theory of international political economy is one of these theories. In fact, it has been one of the most popular theories when it comes to explaining international political economy. Unfortunately, this is a theory whose principles were constructed more than a century ago and consequently, questions have been posed regarding its applicability in the 21st Century. This is in light of the enormous development that the world has gone through in the few last decades. This paper aims to dissect the Marxist international economy and deduce whether it is still applicable and relevant in the 21sst Century. The paper will show that the Marxist concept of international political economy is not relevant in the 21st Century.
Before examining the relevance of the Marxist theory in the 21st Century, it would perhaps be wise to examine what the theory entails. This theory was developed in the mid-19th Century by German philosopher Karl Marx together with another philosopher named Friedrich Engels (Elster, 1986). The two have, in fact, written huge bodies of literature that outline a comprehensive theoretical critique of the concept of capitalism (Allman, 2001). Two of the most prominent books by Marx and his compatriot where a lot of the Marxist ideas can be derived from include “The German Ideology” that was published in 1845 and “The Communist Manifesto” that was published in 1848. The Marx school of thought covers many worldly disciplines. In regard to international political economy, the two authors, Marx examined two nations that were characterized by advanced capitalist economies (Gilpin and Gilpin, 1987). These were Prussia and England. At the time, Europe was going through the industrial revolution, and the two countries were in the midst of this revolution (Bober, 1948). Manufacturing was rising, and there was an increasing number of people working in factories. Another rising trend was urbanization where urban centers were springing up everywhere.
Marx postulates this kind of capitalism which was very advanced divided members of the society into various classes. However, these classes can essentially be assembled to give two distinguishable classes-the owners and the workers, or essentially the rich and the poor. Owners, or capitalists like Marx refers to them run the society. They control everything, own everything and have all the money and all the power (Hobsbawm, 1966). On the other hand, workers do all the work in the society but have no power and money (Marx, 1964). The capitalists own a lot of private property most of which has been acquired illegally. This property is a byproduct of the exploitation and abuse of the workers. In such a capitalist system, workers are forced to adopt the belief that their labor is not theirs, but belongs to the capitalists (Leontief 1938).
Although they receive a little bit of compensation, this compensation is however inadequate because it is way much less than the true value of the result of their labor (Marx, 1964). For instance, the product that they make using their labor is worth much more than the compensation that they receive for their labor. Through this exploitation, the owners are able to acquire profits. Gaining profit accentuates the desire of the owners to acquire even more. This desire causes them to be meaner and more exploitative. Therefore, it emerges that capitalism is a major source of injustice in the society. It creates a system where the society is divided into two sections with one section benefiting and profiting at the expense of the other (Lange, 1935). This creates huge discrepancies of economy between the two sections. While one section of the society is very wealthy; the other is very poor and depend on the other section for ultimate survival (Kaldor, 1957).
Marx (1964) hypothesizes that time will come when workers will realize that the owners are exploiting them. They will then rise up, overthrow the owners and take control of the society. The workers will at the same time overthrow the government since the government is run by the owners and was, in fact, being used by the owners to advance their capitalism ideas. Max contends that this revolution of the workers is in actual sense a natural phenomenon that was inevitable. It would occur naturally in any country or region that is at a highly advanced capitalist stage (Marx, 1964). Because of this, Prussia and England would be the first to face the wrath of the workers’ revolution.
Marx (1964) then suggests that the worker’s revolution will then be followed by the institution of communism. A society guided by communism would have several distinguishable characteristics. One of them is that there would be no private property, Marx goes into details to show how private property is essentially the cause of all society’s evils. According to him, under private property, human beings attempt to establish their power and dominance over each other and at the same time seek to satisfy their own greed and selfish needs. Emphasis on object quantity is in real sense accompanied by the extension of power dominance where the owner of objects exert their power over the workers and oppress them (Marx & Engels, 1965).
The overthrowing of the capitalists would be accompanied by the abolishment of private property. When private property is abolished, each individual in the society will by their own nature be obligated or compelled to work towards achieving a common good. In such a system, the individual rights would be preceded by the common good. Additionally, the government would be unnecessary in such as system. In a communist structure, property would be owned, and everything would be shared between society members (Marx & Engels, 1965). There would be no exploitation in such a system as workers and owners would be integrated into one.
The question that, therefore, remains is whether Marx’s theory of political economy is applicable and relevant in the 21st Century. Some have argued that this theory is indeed applicable in the 21sts Century while others have dismissed its applicability.
As mentioned earlier, Marx’s ideas were articulated and proposed for the 19th-century world that undergoing an industrial revolution. In fact, Marx ideas were mainly for Europe of the 19th Century, which was experiencing the industrial revolution (Burkett, 2006). Given this, it is crucial to try and establish whether these ideas are applicable to the current economic and social conditions of the 21st Century world.
One argument forwarded by proponents of the Marxist theory and its applicability and relevance to the modern world is that the prevailing conditions of the 19th Century have not changed drastically and that is why Marx’s ideas are relevant (Lebowitz, 2007). This argument is however quite faulty because a simple analysis would reveal that the political and economy conditions of the 19th Century have changed drastically. Marx’s world is significantly different from the current world.
There is particularly one huge difference that threatens the applicability of Max’s theory of international political economy to the current world. Marx’s theory is based on the existence of two classes in the society-the owners and the workers. The world of the 21st Century is characterized by more than two classes. Economic changes and proliferation within the economic structure of the world have has been witnessed since the19th century, and this has led to the emergence of new social classes (Hollander, 2008). These include the middle class and the landlords. These new classes do not feature much in Marx’s theories (Lebowitz, 2007). The emergence of the middle class which was not previously accounted under Marx’s original theory is often cited by those who dismiss the relevance of Marx theory in the 21st Century. The middle class signifies the section of the society that comprises of members are neither rich nor poor. They have enough just to get along although their situation is not as bad as that of the workers. Although they still have to work and utilize labor in order to earn a living, they are not exploited by owners in the same magnitude that workers are often exploited.
Marx had naturally assumed at the time that the middle class would eventually rise economically and be at par with the owners or the capitalists. This seemed like a viable assumption at the time (Lange, 1935). The social movement of a worker from his current position in the existing economic structure was unimaginable. Most workers remained in low economic position for life, and many did not even imagine that it was possible to rise economical. In the case of the middle class, rising up further the social ladder was not completely out of the question, and it was viewed as something that was quite unachievable (Foley and Foley, 2009). The movement of the middle class up the ladder would then culminate in them becoming workers, and this would only lead to an increase in the power and domination of the owners (Kaldor, 1957).
This assumption has not however been realized in the modern world. The middle class makes a huge component of the society, and this is likely to continue for a long time. Some even state the middle class may be the most important section of the society when it comes to the economy and there are in fact, there are many regions in the world where the middle class is the main driver of the economy. This aspect somehow derails the relevance and applicability of Marx’s the in the modern theory in the modern world (Hollander, 2008).
According to Karl Marx, the only way that the fortunes of the working class would be altered was via revolutions. Marx held that the class structure of the time was so rigid, and it was impossible for individuals to break it alone (Lange, 1935). This is why Marx thought that is was impossible for the working class to rise up the social ladder naturally. A member of the working class was essentially confined to this class for life and the rigidness of the social class structure made sure that there was always a safe social and economic distance between the capitalists and the working class (Marx & Engels, 1965). The capitalists knew very well that unless the working class provided labor for them, they would not be able to earn any living. At the same time, the compensation, the received for their labor was only enough to sustain only some of basic needs and was not enough for them to slowly accumulate wealth and become capitalists themselves (Marx & Engels, 1965).
However, since Marx put forth these theories, the situation has played out quite different. The last 100 years has seen the success of many working class members who have broken the social class divide and become rich and wealthy (Heilbroner, 1994). This has happened even in some of the countries like England, which Marx had identified as being at a very highly advanced stage of capitalism. In fact, throughout many capitalist societies and not just those in Europe, members of the working class have slowly worked their way up the social ladder to become rich and wealthy. This aspect is still visible in the 21st Century where individuals born into poor communities and societies slowly rise up and join the wealthy section of the society (Hollander, 2008).
This is obviously a huge dent to the theory of Marxism and hugely threatens its applicability and relevance to the modern world. Marx’s assumption was that the working class had no means of rising up the social ladder because there were no avenues to do so. In fact, Marx did not foresee any avenues in the future that could facilitate the movement of the working class from their current status to a higher status (DiMaggio, 2009). This assumption has been rendered irrelevant and quite meaningless seeing that the last 100 years have witnessed the emergence of many avenues through which the members of the working class can rise up the social ladder. This includes aspects such as entrepreneurship and internet based business. The latter has particularly revolutionized the arrangement of the social and economic structure.
The internet is a free resource that can be utilized by each and every one to succeed. One can utilize it to earn money without necessarily turning to the capitalists. In fact, there have been very many success stories of people who used the internet to get wealthy and these stories continue emerging even today. It is not only the internet that has spurred the economic rise of the working class. Other careers that do not necessarily involve the interference of the capitalists have sprung up (DiMaggio, 2009). These include careers like sports which in the past would never have been considered as a full-time career or as a career that has the capability to make one rich. In the end, there are many stories in the current world about an individual from a poor background becoming wealthy through sports.
Another aspect that can be used to exhibit the relative irrelevance of Marxism in the 21st Century is in regards to the global economic recession. The world experienced one of the greatest economic recession starting from 2008 going all the way to 2010. This economic crisis is not explainable in Marxists terms. Generally, Karl Marx held the idea that an economic crisis was only possible if an entire system failed or crumbled. In a capitalist system, he was of the opinion that the flow of finances would remain steady because the individual institutions that made up the entire system could not fail (Lange, 1935). If an economic crisis was to occur, it would require the falling or failing of the entire system. Once again, this was highly unlikely given that the individual components of the system were very strong indeed, and it was quite hard to see or imagine them falling. The recent economic recession played out in a completely different or opposite manner than Marx had initially suggested. In fact, it happened in a way that Marx had postulated was impossible.
The economic recession commenced with individual institutions collapsing and closing down. Many went bankrupt and slowly by slowly, other institutions went through the same fate. It was almost like a cycle of business collapse from one industry to the other. Eventually, the collapse of the individual institutions and structures led to the collapse of the whole economic system and the world was plunged into a massive economic recession. Therefore, the economic recession happened in a manner that was quite to what Marx had suggested. This once again shows the irrelevance of Marx theory in the 21st century.
However, it would be inaccurate to state that Marx’s theory are completely inapplicable. In fact, his theory regarding the strength and weakness of economic systems and their susceptibility to collapse might have been applicable in the 19th Century Europe (Foley and Foley, 2009). At the same time, it was impossible to foresee the economic systems of the region collapsing individually. This can be attributed to the rigid social class structure of the time. As long as the individual institutions remained at the hands of the capitalists and the workers only provided the required labor, there were very few factors that could facilitate their collapse. This is why Marx regarded them to be very strong and did not foresee them collapsing at an individual level. This once again depicts the massive difference between 19th Century Europe and the modern world of the 21st Century.
It shows that Marx’s assertions are no longer applicable or relevant because even the nature of the individual economies systems has changed. Modern business and institutions are not simply run by capitalists but are instead run by various parties. The input of each party is different, and their ideas also clash. Consequently, these institutions are more susceptible to collapse and once they collapse, they may create a butterfly effect that would eventually culminate in the collapse of an entire economic structure like it was the case back in 2008 when the global economy collapsed.
New avenues have not only opened for the working class (who can now sufficiently provide for themselves without having to give their labor to the capitalists) but the capitalists have also found new ways of achieving production. The Marxists theory postulates that production is at the core of society’s existence (Kaldor, 1957). Production was achieved when the working class provided labor for the capitalists who would then be the major beneficiaries of this production. In actual sense, survival of the capitalist as dependent on the provision of labor by the working class (Hollander, 2008).
The working class would work on the private property of the capitalists to facilitate production. They would be compensated a little money, but the goods that their labor produced would only benefit the capitalists. As it was previously seen, the compensation that the workers received was of significantly less value than the true worth of the product that their labor had produced. What they may not have realized was that if they refused to provide labor, production would collapse, and the capitalists would suffer (Foley and Foley, 2009). However, in the 21st Century, the capitalists are not entirely reliant on the working class for the provision of labor (Uchida, 2004). In fact, many capitalists have ventured into businesses and economic endeavors that do not necessarily require the input of the working class (Foley and Foley, 2009). In simple terms, their survival is no longer entirely dependent on the services of the working class (Lebowitz, 2007). This is once again an example of why Marx’s theory of international political economy is no longer applicable. While Marx theory showed that the capitalism depended on the working class for their own survival and profit making, the 21st century is characterized by economic conditions that enable capitalists to venture into endeavors that do not require the input of the working class (Hollander, 2008).
Conclusion
International Political Economic as a discipline has been subjected to intensive research and Karl Marx name is a name often mentioned when discussing the theories of this discipline ((Gilpin and Gilpin, 1987). This essay has shown that Marx’s theory is a critique of capitalism and an advocacy of communism. Marx wrote this theory at a time when Europe was experiencing an industrial revolution and when capitalism was well established in many European countries. The world of the 21st century is very different from Marx’s world, both politically and economically and this is one of the primary reason why his theory of international political economy is no longer relevant and applicable. Marx foresaw a future world characterized by Communism. This would have occurred after members of the working class who had been oppressed for long in the capitalist structure revolted and instituted a new economic structure. However, the capitalism structure has persisted, and communism is, in fact, common in only a handful of countries and regions in the world. Although many still debate on the relevance of Marx’s school of thought in the 21st century, there’s increasing evidence that his are becoming less significant, and their utility is also declining in the 21sts Century. Communism has been widely banished by many, and it is not foreseeable that in the future, it could become the economic norm. Capitalism looks like it’s here to stay. Therefore, in a nutshell, it would be fair to conclude that the Marxist conception of International political economy is no longer relevant in the 21st Century.
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