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Marxist Theory Karl Marx 1818-1883  Term Paper

(Marx, "The Production of Absolute Surplus-Value") the working class is forced to work for the capitalist since in the "Capitalist" stage of social development all the sources of production are in the hands of the Capitalist who deliberately keeps the wages at low levels by creating unemployment and a ready army of the unemployed. Marx explains that capitalism ultimately leads to decreasing rates of profits, boom and bust cycles, which progressively get worse until the whole system collapses on itself. Significance of Marx's Contribution to Economics

Even the worst detractors of Karl Marx recognize that he was a masterful economist. His rigorous analysis of capitalism in Das Kapital is considered an unparalleled seminal work which explains in detail how Capitalism works. Marx's labor theory of value, decreasing rates of profit and increasing concentration of wealth still provide a valuable insight into how the major economic system of our age operates and just why it is "an alienating and contradictory economic system."

The widening inequality between the rich and the poor in the current age, the increasing power of the monopolistic multinational corporations as well as the ever-present threat of "boom and bust" cycles in most capitalist economies underline the significance of Marx's critique of capitalism.

Loop Holes in His Theory

The main drawback in Karl Marx's economic theory is that although he gives an insightful analysis of capitalism, he offers only a sketchy picture of the alternative economic theory -- socialism. Marx only vaguely predicts that the problems created by capitalism would be eliminated in the next stage of social development. How exactly such a utopian Communist stage would come about has not been fully explained. As a result, people...

Marx also underestimated the resilience and longevity of capitalism that has survived and even thrived despite its numerous drawbacks as an ideal economic system.
Conclusion

Although Karl Marx is currently not in fashion, his contribution to economics, particularly his insightful study of Capitalism is still relevant. Despite some glaring drawbacks in his economic theories, they deserve to be studied so that the undesirable effects of capitalism, such as the growing socio-economic inequality around the world, can be effectively tackled.

Works Cited

Marx, Karl." Article in Microsoft Encarta Encyclopedia. Online Version. 2004. November 19, 2004. http://encarta.msn.com/encyclopedia_761555305/Marx_Karl.html

Karl Marx. Das Kapital. (Capital). The English edition (1887), edited by Frederick Engels ONLINE VERSION Part III: The Production of Absolute Surplus-Value. November 19, 2004. http://www.marxists.org/archive/marx/works/1867-c1/ch07.htm

Kreis, Steven. "Karl Marx, 1818-1883." History Guide. Lectures on Modern European Intellectual History. 2000. November 19, 2004. http://www.historyguide.org/intellect/marx.html

His father, however, had agreed to baptism as a Protestant so that he would not lose his job as a respected lawyer in Trier

Adam Smith had specified four stages of successive social development, i.e., the age of hunters, the age of herders or shepherds, the age of farmers and the commercial age

For example, the stock market bubbles and the asset price bubbles that are re-visited every few years all over the world

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Works Cited

Marx, Karl." Article in Microsoft Encarta Encyclopedia. Online Version. 2004. November 19, 2004. http://encarta.msn.com/encyclopedia_761555305/Marx_Karl.html

Karl Marx. Das Kapital. (Capital). The English edition (1887), edited by Frederick Engels ONLINE VERSION Part III: The Production of Absolute Surplus-Value. November 19, 2004. http://www.marxists.org/archive/marx/works/1867-c1/ch07.htm

Kreis, Steven. "Karl Marx, 1818-1883." History Guide. Lectures on Modern European Intellectual History. 2000. November 19, 2004. http://www.historyguide.org/intellect/marx.html

His father, however, had agreed to baptism as a Protestant so that he would not lose his job as a respected lawyer in Trier
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