DEFINITION of 'Marxism'
Marxism is a social, political and economic philosophy that examines the effect of capitalism on labor, productivity and economic development. Marxism posits that the struggle between social classes, specifically between the bourgeoisie, or capitalists, and proletariat, or workers, defines the development of the state, and the bourgeoisie seek to gain control of the factors of production from the "masses." Only by eliminating the control of the economy from private ownership will the economy continue to grow.
BREAKING DOWN 'Marxism'
Because Marxism encompasses social and political ideologies, it is often considered separate from Marxian economics, which focuses on the criticisms of capitalism brought forth by Karl Marx in his 1867 book, "Das Kapital."
Marx's Views on Capitalism
Marx saw capitalism as one step in the historical progression of economic systems. According to Marx, the inherent inequalities of the capitalist economic system cause tensions between business owners and workers. The resulting conflicts will eventually lead to a revolution in which capitalism is abolished. As a result of the revolution, Marx predicted that private ownership would be replaced by collective ownership.
Marx believed capitalism is grounded in commodities, which are things bought and sold. In Marx's view, an employee's labor is a form of commodity. However, since ordinary laborers do not own modes of production such as factories, buildings and materials, they have little power in the capitalist economic system. Workers are also readily replaceable in periods of high unemployment, further devaluing their perceived worth.
Business owners seek to get the most work out of their laborers while paying them the lowest wages possible. They also own the end product that is the result of the worker's labor, and ultimately profit from its surplus value, which is the difference between what it costs to produce the item and the price for which it is eventually sold.
Marx felt that capitalism creates an unfair imbalance between capitalists and the laborers whose work they exploit for their own personal gain. In turn, this exploitation leads the worker to view his employment as nothing more than a means of survival. Since the worker has little personal stake in the process of production, he becomes alienated from it and resentful toward the business owner and his own humanity.
In Marx's view, economic factors and relationships between social classes are closely interrelated. While laborers are focused on basic survival, capitalist business owners are concerned with acquiring more and more money. According to Marx, this economic polarity creates social problems that are eventually remedied through a social and economic revolution.