Marxism and Neoliberalism Description of Capitalism Essay

Introduction

Capitalism is a form of economy which can be described as a system whose resources and goods are exclusively owned by private firms and individuals (Pomeroy 10). Therefore, the production of goods and services depends on a market economy which is controlled by the demand and supply control forces. A typical scenario in a capitalist market is laissez-faire capitalism where private firms determine what to produce, where to invest, target customers, or determination of the prices to dispose of goods and services. However, capitalism has been described in different approaches by different scholars. Therefore, this paper seeks to identify how Neoliberalism and Marxism differ in their description of capitalism based on the description and empirical support of the theories.

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Description of Theories

Marxism theory is a political, social and economic philosophy which examines capitalism's impact on productivity, labor, and general economic development (Collier 20). Marxism suggested that the differences among social classes particularly the capitalists and worker, triggered development programs in states as the capitalists take control of production factors from the people (Collier 23). Therefore, from the Marxism viewpoint, economic growth depends on the ability of the government to take control of the economy away from private developers and investors in an economy. On the other hand, neoliberalism economic policy model argues that economic factors ought to get transferred from the public sector to the private sector. Neoliberalism is built upon neoclassical economics basics which contend that any government must take charge of subsidies, lessen the deficit spending, expand the tax base by improving the tax laws, and open up more markets for trade as well as limit chances of protectionism (Buscher, et al 15). Thus, neoliberalism requires the government or the authorities in a particular economy to eradicate the fixed exchange rates, push for deregulation of businesses, allow the privatization of businesses and private property ownership (Collier 21).

Empirical Support of Argumentation

Marxism in the description of capitalism considered it as a systemic progression in economics. Marxism suggests that inequalities in a capitalist economy create massive tension among businesses owners and the staffs (Pomeroy 13). This may cause increased tension which might spur a revolution hence eradicating capitalism. Therefore, collective ownership that would experience would replace private ownership in a capitalist business economy. Marxism also resolved that the capitalist economy is based on buying and selling of commodities. Marx iterated that the labor which employees provide is a form of commodity (Pomeroy 13). Laborers do not own businesses, firms, and factors, and thus have little or no power over in a capitalist economy. Therefore, business owners in a capitalist economy replace most of their staff when demand for their commodities fall, an act which is devaluing to the workers. Business owners generate incentive by paying farmers the least possible wages, resulting in maximum profits. Investors own the final output of production, as well as the profit from the production surplus. The result of laborers' effort is sold at a higher value from its initial production costs to the buyers (Meltzer 33). The business owners remain with the profits once they settle all their bills and pay the staff dues.

Marx iterated that capitalism results into a huge imbalance between workers and the capitalists who are believed to exploit the former for personal gains. The workers are forced to consider their jobs as a means of making ends meet rather than an opportunity to grow. The workers engage in most of the production process but own close to nothing. The staffs are likely to resent from the business and its owner. Marxism reported that social classes and economic factors relate to one another. Business owners focus on making more and more money, while laborers struggle to survive (Pomeroy 14). Therefore, a huge polarity develops between business owners and laborers, whose solution is economic and social revolution. On the other hand, neoliberalism gave a different perspective on capitalism. It contended that all resources in capitalism are bestowed on few people with a big population working for the business owners. Neoliberalism augurs with business privatization, free trade, fiscal austerity and reducing government spending (Schweickart 22). A minimalist mentality is highly advocated in a neoliberalist mentality. For neoliberalism, the government in capitalism ought to protect but not interfere with business activities.

Conclusion

Capitalist economy describes a market where all wealth is bestowed on investors, while the rest of the people are laborers who work under the capitalists to generate commodities. The laborers have little or no control of the output from their labor, and easily dispensable when the demand for goods falls. Marxism explains that the tremendous gap between business owners and the workers. The workers struggle to make ends meet, and are quite resentful about the business and their owners. The significant disparity elicits a social and economic revolution that would see personal ownership in capitalist market replaced by joint ownership. Neoliberalism also argues that the government deserves the least interference in businesses while ensuring the market is free and fair. The government must assure its citizens of mean spending so that economic growth and development becomes a reality. Thus, neoliberalism in their description of capitalism give the least attention to laborers and business owners rather generalize challenges they face from an economic perspective.

Works Cited

Buscher, Bram, Et Al. "Towards a Synthesized Critique of Neoliberal Biodiversity Conservation." Capitalism Nature Socialism 23.2 (2012): 4-30.

Collier, Paul. The Future of Capitalism: Facing the New Anxieties. , 2018. Internet Resource.

Meltzer, Allan H. Why Capitalism?Oxford: Oxford University Press, 2012. Print.

Pomeroy, Anne Fairchild. Marx and Whitehead: Process, Dialectics, and The Critique of Capitalism. SUNY Press, 2012.

Schweickart, David. After Capitalism. Lanham, Md: Rowman & Littlefield Publishers, 2011. Internet Resource.