2.3 Marxist and Neo-Marxist Approaches

Marxist economic theory focuses on class struggle and critiques capitalism's exploitation of workers. It highlights how the bourgeoisie profit from surplus value created by the proletariat, leading to wealth concentration and economic instability.

In global context, Marxism examines how capitalist expansion creates uneven development and imperialism. It analyzes how core countries dominate the periphery through resource extraction and an international division of labor that perpetuates inequalities.

Marxist Economic Theory

Fundamentals of Marxist economics

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• Class struggle
  • Bourgeoisie own the means of production (factories, land, capital) and exploit the proletariat who sell their labor for wages
  • Inherent conflict between the two classes due to opposing interests (profits vs wages)
• Critique of capitalism
  • Alienation of labor
    • Workers are separated from the products they create and have no control over the production process (assembly line work)
  • Surplus value
    • Difference between the value workers create through their labor and the wages they receive
    • Source of capitalist profits (exploitation)
  • Concentration of wealth and power in the hands of the bourgeoisie leads to inequality (wealth gap)
  • Inherent instability and crisis-prone nature of capitalism
    • Overproduction (too many goods) and underconsumption (low wages) lead to economic crises (Great Depression)

Marxism in global inequalities

• Uneven development
  • Capitalist expansion leads to the exploitation of less developed countries (colonialism)
  • Resources flow from the periphery to the core (raw materials to Europe)
• Imperialism
  • Advanced capitalist countries dominate and exploit less developed countries to maintain power
  • Extraction of raw materials (oil, minerals) and cheap labor (sweatshops) from the periphery
• International division of labor
  • Core countries specialize in high-value-added production (technology)
  • Peripheral countries specialize in low-value-added production (agriculture)
• Marxist analysis highlights the systemic nature of global inequalities rooted in the structure of capitalism

Neo-Marxist Approaches

Neo-Marxist contributions to theory

• Dependency theory
  • Developed by Raúl Prebisch, André Gunder Frank, and others
  • Underdevelopment is a product of the global capitalist system, not a stage of development
  • Core countries exploit and maintain the underdevelopment of peripheral countries (debt, unequal trade)
• World-systems analysis
  • Developed by Immanuel Wallerstein
  • Global capitalist system divided into core (US, Europe), semi-periphery (BRICS), and periphery (Global South)
  • Unequal exchange between the zones perpetuates global inequalities
  • Cyclical rhythms (50-60 year Kondratieff waves) and secular trends (500 year cycles) shape the world-system

Strengths vs weaknesses of Marxist approaches

• Strengths
  • Provides a systemic analysis of global inequalities and power dynamics (North-South divide)
  • Highlights the historical and structural roots of underdevelopment (colonialism, slavery)
  • Offers a critique of the exploitative nature of capitalism (sweatshops, environmental destruction)
• Weaknesses
  • Tends to oversimplify the complexities of international relations (state vs class power)
  • Underestimates the role of agency and domestic factors in shaping development (corrupt elites)
  • Limited in explaining the success of some developing countries (East Asian tigers)
  • Insufficient attention to non-economic factors (culture, institutions, religion)