Conflict Theory

Definition of 'Conflict Theory'


A theory propounded by Karl Marx that claims society is in a state of perpetual conflict due to competition for limited resources. Conflict theory holds that social order is maintained by domination and power, rather than consensus and conformity. According to conflict theory, those with wealth and power try to hold on to it by any means possible, chiefly by suppressing the poor and powerless. Conflict theory also ascribes most of the fundamental developments in human history, such as democracy and civil rights, to capitalistic attempts to control the masses rather than to a desire for social order.

Investopedia explains 'Conflict Theory'




Conflict theory has been used to explain a wide range of social phenomena, including wars and revolutions, wealth and poverty, discrimination and domestic violence.
 
The financial crisis of 2008-09 and the subsequent bank bailouts are good examples of real-life conflict theory, according to authors Alan Sears and James Cairns in their book “A Good Book, in Theory”. Conflict theory proponents view the financial crisis as the inevitable outcome of the inequalities and instabilities that plague Western societies, since the present structure of the global economic system enables the largest banks and institutions to avoid government oversight and take huge risks that only reward a select few. Sears and Cairns note that large banks and big business subsequently received bailout from the same governments that claim to have insufficient funds for large-scale social programs such as universal healthcare. This dichotomy supports a fundamental assumption of conflict theory, which is that mainstream political institutions and cultural practices favor dominant groups and individuals.
 


Filed Under: ,

comments powered by Disqus
Hot Definitions
  1. Joint Venture - JV

    A business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task. This task can be a new project or any other business activity. In a joint venture (JV), each of the participants is responsible for profits, losses and costs associated with it.
  2. Aggregate Risk

    The exposure of a bank, financial institution, or any type of major investor to foreign exchange contracts - both spot and forward - from a single counterparty or client. Aggregate risk in forex may also be defined as the total exposure of an entity to changes or fluctuations in currency rates.
  3. Organic Growth

    The growth rate that a company can achieve by increasing output and enhancing sales. This excludes any profits or growth acquired from takeovers, acquisitions or mergers. Takeovers, acquisitions and mergers do not bring about profits generated within the company, and are therefore not considered organic.
  4. Family Limited Partnership - FLP

    A type of partnership designed to centralize family business or investment accounts. FLPs pool together a family's assets into one single family-owned business partnership that family members own shares of. FLPs are frequently used as an estate tax minimization strategy, as shares in the FLP can be transferred between generations, at lower taxation rates than would be applied to the partnership's holdings.
  5. Yield Burning

    The illegal practice of underwriters marking up the prices on bonds for the purpose of reducing the yield on the bond. This practice, referred to as "burning the yield," is done after the bond is placed in escrow for an investor who is awaiting repayment.
  6. Marginal Analysis

    An examination of the additional benefits of an activity compared to the additional costs of that activity. Companies use marginal analysis as a decision-making tool to help them maximize their profits. Individuals unconsciously use marginal analysis to make a host of everyday decisions. Marginal analysis is also widely used in microeconomics when analyzing how a complex system is affected by marginal manipulation of its comprising variables.
Trading Center