Marxism: What It Is and Comparison to Communism, Socialism, and Capitalism

Marxism Definition

Investopedia / Zoe Hansen

What Is Marxism?

Marxism is a social, political, and economic philosophy named after Karl Marx. It examines the effect of capitalism on labor, productivity, and economic development and argues for a worker revolution to overturn capitalism in favor of communism.

Marxism posits that the struggle between social classes—specifically between the bourgeoisie, or capitalists, and the proletariat, or workers—defines economic relations in a capitalist economy and will inevitably lead to revolutionary communism.

Key Takeaways

  • Marxism is a social, political, and economic theory originated by Karl Marx that focuses on the struggle between capitalists and the working class.
  • Marx wrote that the power relationships between capitalists and workers were inherently exploitative and would inevitably create class conflict.
  • He believed that this conflict would ultimately lead to a revolution in which the working class would overthrow the capitalist class and seize control of the economy.

Understanding Marxism

Marxism is both a social and political theory, which encompasses Marxist class conflict theory and Marxian economics. Marxism was first publicly formulated in 1848 in the pamphlet The Communist Manifesto by Karl Marx and Friedrich Engels, which lays out the theory of class struggle and revolution. Marxian economics focuses on the criticisms of capitalism, which Karl Marx wrote about in his book Das Kapital, published in 1867.

Generally, Marxism argues that capitalism as a form of economic and social reproduction is inherently unfair and flawed, and because of this will ultimately fail. Capitalism is defined as a mode of production whereby business owners (capitalists) own all of the means of production - the factory, the tools and machinery, the raw materials, the final product, and the profits earned from their sale - while workers (labor) are hired for wages and have no claim on those things. Moreover, the wages paid to workers are lower than the economic value that their work creates for the capitalist. This surplus labor is the source of capitalists' profits, and is the root of the inherent class struggle between labor and capital.

Another important theory developed by Marx is known as historical materialism. This theory proposes that society at any given point in time is ordered by the type of organization and technology used in the process of production. Under industrial capitalism, society is so ordered with capitalists organizing labor in factories or offices where they work for wages using modern tools and machines.

Marxian Economics

Like the other classical economists, Karl Marx believed in a labor theory of value (LTV) to explain relative differences in market prices. This theory stated that the value of a produced economic good can be measured objectively by the average number of labor hours required to produce it. In other words, if a table takes twice as long to make as a chair, then the table should be considered twice as valuable. What Marx added was that this labor value actually represented the exploitation of workers.

Marx claimed that there are two major flaws in capitalism that lead to the exploitation of workers by employers: the chaotic nature of free market competition and the extraction of surplus labor. Ultimately, Marx predicted that capitalism would eventually destroy itself as more people become relegated to working-class status, inequality rose, and competition would lead the rate of corporate profits to zero. This would lead, he surmised, to a revolution where production would be turned over to the working class as a whole.

Class Conflict and the Supposed Demise of Capitalism

Marx’s class theory portrays capitalism as one step in the historical progression of economic systems that follow one another in a natural sequence. They are driven, he posited, by vast impersonal forces of history that play out through the behavior and conflict among social classes. According to Marx, every society is divided into social classes, whose members have more in common with one another than with members of other social classes.

The following are some key elements of Marx’s theories of how class conflict would play out in a capitalist system.

  1. Capitalist society is made up of two classes: the bourgeoisie, or business owners, who control the means of production, and the proletariat, or workers, whose labor transforms raw commodities into valuable economic goods.
  2. Ordinary laborers, who do not own the means of production, such as factories, buildings, and materials, have little power in the capitalist economic system. Workers are also readily replaceable in periods of high unemployment, further devaluing their perceived worth.
  3. To maximize profits, business owners have an incentive to get the most work out of their laborers while paying them the lowest possible wages. This creates an unfair imbalance between owners and laborers, whose work the owners exploit for their own gain.
  4. Because workers have little personal stake in the process of production, Marx believed they would become alienated from it, as well as from their own humanity, and turn resentful toward business owners.
  5. The bourgeoisie also leverage social institutions, including government, media, academia, organized religion, and banking and financial systems, as tools and weapons against the proletariat with the goal of maintaining their position of power and privilege.
  6. Ultimately, the inherent inequalities and exploitative economic relations between these two classes will lead to a revolution in which the working class rebels against the bourgeoisie, takes control of the means of production, and abolishes capitalism.

Thus Marx thought that the capitalist system inherently contained the seeds of its own destruction. The alienation and exploitation of the proletariat that are fundamental to capitalist relations would inevitably drive the working class to rebel against the bourgeoisie and seize control of the means of production. This revolution would be led by enlightened leaders, known as “the vanguard of the proletariat,” who understood the class structure of society and who would unite the working class by raising awareness and class consciousness.

As a result of the revolution, Marx predicted that private ownership of the means of production would be replaced by collective ownership, first under socialism and then under communism. In the final stage of human development, social classes and class struggle would no longer exist.

Karl Marx believed that the proletariat would overthrow capitalism in a violent revolution.

Communism vs. Socialism vs. Capitalism

Marx and Engels' ideas laid the groundwork for the theory and practice of communism, which advocates for a classless system in which all property and wealth are communally (rather than privately) owned. Although the former Soviet Union, China, and Cuba (among other nations) have had nominally communist governments, there’s never actually been a purely communist state that has completely eliminated personal property, money, and class systems.

Socialism predates communism by several decades. Its early adherents called for a more egalitarian distribution of wealth, solidarity among workers, better working conditions, and common ownership of land and manufacturing equipment. Socialism is based on the idea of public ownership of the means of production, but individuals may still own property. Rather than arising out of a class revolution, socialist reform takes place within the existing social and political structures, whether they're democratic, technocratic, oligarchic, or totalitarian.

Both communism and socialism oppose capitalism, an economic system characterized by private ownership and a system of laws that protect the right to own or transfer private property. In a capitalist economy, private individuals and enterprises own the means of production and the right to profit from them. Communism and socialism aim to right the wrongs of capitalism’s free-market system. These include worker exploitation and inequities between rich and poor.

Critiques of Marxism

Although Marx inspired multitudes of followers, many of his predictions have not come to pass. Marx believed that increasing competition would not produce better goods for consumers; instead, it would lead to bankruptcy among capitalists and the rise of monopolies as fewer and fewer were left to control production. Bankrupt former capitalists would join the proletariat, eventually creating an army of the unemployed. In addition, the market economy, which by its nature is unplanned, would experience huge supply-and-demand problems and cause severe depressions.

Yet over the years, capitalism has not collapsed as a result of fierce competition. Although markets have changed over time, they haven’t led to a preponderance of monopolies. Wages have risen and profits have not declined, although economic inequality has increased in many capitalist societies. And though there have been recessions and depressions, they are not thought to be an inherent feature of free markets. Indeed, a society without competition, money, and private property has never materialized, and the history of the 20th century suggests it is likely an unworkable concept.

What Kind of Philosophy Is Marxism?

Marxism is a philosophy developed by Karl Marx in the second half of the 19th century that unifies social, political, and economic theory. It is mainly concerned with the battle between the working class and the ownership class and favors communism and socialism over capitalism.

What Did Marx Predict for the Future?

Marx thought that the capitalistic system would inevitably destroy itself. The oppressed workers would become alienated and ultimately overthrow the owners to take control of the means of production themselves, ushering in a classless society.

Was Karl Marx Right?

Not so far. Some countries, such as the former Soviet Union, China, and Cuba, have attempted to create a communist society, but they were or have been unable to entirely eliminate personal property, money, and class systems. In 2021, capitalism, in its various forms, remains the dominant economic system. Of course, some of his critiques of capitalism remain true to this day, such as the fact that corporations will acquire one another to become larger and more concentrated, that unemployment and poverty will persist, and that workers will continue to be paid less than what they might deserve.

Is Marxism the Same Thing as Communism?

Marxism is a system of socioeconomic analysis, while communism is a form of economic production that extends to government or political movements. Marxism is a broad philosophy developed by Karl Marx in the second half of the 19th century that unifies social, political, and economic theory. It is mainly concerned with the battle between the working class and the ownership class and favors communism and socialism over capitalism.

The Bottom Line

Marxism refers to the social and economic theory derived from the writings of Karl Marx in the 19th century. Marxian economics describes how the capitalist system of production is inherently contradictory and unfair, exploiting workers and extracting surplus labor. Marx's social theories connected these flaws of capitalism with a growing class conflict between labor and business owners, ultimately leading to a socialist revolution that would empower the working class and create communal ownership of the means of production. While socialism has cropped up in certain places, notably the USSR and in China, Marx's vision of a communist utopia have not been fulfilled, while capitalism has continued to grow and flourish. This has led many economists today to discount Marxism and label it as heterodox.

Article Sources
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  1. American Journal of Public Health. "Friedrich Engels: Businessman and Revolutionary."

  2. "Karl Marx: Capital A Critique of Political Economy Volume I, Book One: The Process of Production of Capital."

  3. Marxists Internet Archive. "Works of Karl Marx 1843, A Contribution to the Critique of Hegel's Philosophy of Right."

  4. The Library of Economics and Liberty. "Marxism."

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