Conflict Theory

AAA

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.
 

RELATED TERMS
  1. Capitalism

    A system of economics based on the private ownership of capital ...
  2. Keynesian Economics

    An economic theory of total spending in the economy and its effects ...
  3. Marxian Economics

    A school of economic thought based on of the work of Karl Marx. ...
  4. Marxism

    A social, political and economic philosophy that examines the ...
  5. Karl Marx

    A philosopher and economist famous for his ideas about capitalism ...
  6. Conflict Of Interest

    A situation where a professional, or a corporation, has a vested ...
RELATED FAQS
  1. When has the United States run its largest trade deficits?

    In macroeconomics, balance of trade is one of the leading economic metrics that determines the trading relationship of a ... Read Full Answer >>
  2. Which is more important to a nation's economy, the balance of trade or the balance ...

    There is no question the composition of a country's balance of payments is more important than its balance of trade. This ... Read Full Answer >>
  3. What are the ethical arguments against government subsidies to companies like Tesla?

    The ethical argument behind government subsidies is that they should be put into place to help industries that will, in turn, ... Read Full Answer >>
  4. How can tariffs cause inefficiencies in domestic industries?

    Any government regulation naturally creates inefficiencies in a pure supply and demand marketplace. When it comes to the ... Read Full Answer >>
  5. How do changes in interest rates affect the spending habits in the economy?

    Changes in interest rates can have different effects on consumer spending habits depending on a number of factors, including ... Read Full Answer >>
  6. Why would a company decide to utilize H-shares over A-shares in its IPO?

    A company would decide to utilize H shares over A shares in its initial public offering (IPO) if that company believes it ... Read Full Answer >>
Related Articles
  1. Entrepreneurship

    Adam Smith And "The Wealth Of Nations"

    Adam Smith's 1776 classic may have had the largest global impact on economic thought.
  2. Economics

    Adam Smith: The Father Of Economics

    This free thinker promoted free trade at a time when governments controlled most commercial interests.
  3. Professionals

    Dealing With 10 Coworker Personality Conflicts

    The financial world is filled with dysfunctional workers; find out if you're one of them and what you can do about it.
  4. Economics

    The History Of Economic Thought

    Economics is a vital part of every day life. Discover the major players who shaped its development.
  5. Fundamental Analysis

    Standard Of Living Vs. Quality Of Life

    What is the difference between a standard of living and quality of life? Find out in this breakdown.
  6. Economics

    Why Can't Economists Agree?

    There are many reasons why economists can be given the same data and come up with entirely different conclusions.
  7. Forex Education

    Free Market Maven: Milton Friedman

    As proponent of free market capitalism, this economist changed the way the world's economies operate.
  8. Insurance

    Free Markets: What's The Cost?

    Some argue that when the free market fails to protect consumers, government regulation is required.
  9. Options & Futures

    The Chinese Wall Protects Against Conflicts Of Interest

    After the crash of 1929, this barrier helped define ethical limits, but it did little to prevent fraud.
  10. Fundamental Analysis

    The Basics Of Game Theory

    Break down and examine the potential consequences of economic/financial scenarios.

You May Also Like

Hot Definitions
  1. Bogey

    A buzzword that refers to a benchmark used to evaluate a fund's performance. The benchmark is an index that reflects the ...
  2. Xetra

    An all-electronic trading system based in Frankfurt, Germany. Launched in 1997 and operated by the Deutsche Börse, the Xetra ...
  3. Nuncupative Will

    A verbal will that must have two witnesses and can only deal with the distribution of personal property. A nuncupative will ...
  4. OsMA

    An abbreviation for Oscillator - Moving Average. OsMA is used in technical analysis to represent the variance between an ...
  5. Investopedia

    One of the best-known sources of financial information on the internet. Investopedia is a resource for investors, consumers ...
  6. Unfair Claims Practice

    The improper avoidance of a claim by an insurer or an attempt to reduce the size of the claim. By engaging in unfair claims ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!