Siobhan Kerr.

4527044
Liberal Arts. City Flinders
VU20751 Economy and Society
Assessment 3- Essay
Karl Marx (1818-1883) was known as the father of communism as well as the most
influential political thinker from the 19th century. Marxs key views about society, economy
and politics contain theories that are still influence todays society. This essay will explain the
three key concepts of class struggle and conflict under capitalism, economic crisis under
capitalism and the transition to a socialist system. Furthermore the essay will determine the
positives and negatives of Marxs three key concepts.
Marx developed theories about society, economics and politics that were all called Marxism.
Marxs ideas on economy and politics were accepted in the socialist movement. Marx aim to
understand the concept of communism which was based upon the alienation of labour
under capitalism and a communist society.
The term- class is defined as the division of society according to economic circumstances.
Different views of class in political economy associate it with inequalities of property
ownership, power and income (Stillwell glossary, 2009). The phrase class consciousness
refers to the awareness of ones place within the system of social class.
The structure of the economy causes inequalities between classes, as it created different
patterns of supply and demand under the two classes called the bourgeoisie and proletariat.
The two classes contradict one another. The terms- bourgeoisie had the pressure to invest
and accumulate profit within the competitive capitalist market. Whereas the Proletariat
retained a loss of economic surplus as well as receiving unequal trading power of the
employer and workers. Marxs idea regarding class struggle enabled the movement of prices
and abundance on demand and supply to be weakened. Capitalism alienated and exploited
society with labour. In Stilwell Political Economy, the Contest of Ideas it states
...arrangement that suited capitalists employers gave control over workers time, control over quality of
products (pp.) Due to capitalism, workers would have to work between 14-18 hours a day

with the help of children who were apart of the exploitation of labour. Labour sparked urban
poverty which then created horrible housing conditions and overcrowding. There then grew a
wide spread of disease as there was poor sanitation. Marxs pivotal idea, weakened
overtime as the network of income and wealth in the economy and society, as it resulted in
changes between the struggle and conflict in classes and society.
Marxs established two theories on the economic crisis under capitalism. As Marxs was
anxious about the business circle it pointed to how capitalism was vulnerable. One crisis
theory was based on the issue of falling rate of profit. If this occurred, as it would result in
labour shortages which in turn would make wages rise and profit share decrease in profit.
The bigger outcome would be a downturn, which would mean that workers would be laid off
from work as business underwent bankrupt or a decrease in investments. The market then
would adjust in order to lower output in wages and repair profit. Stilwell chapter cites,
income became crucial for the growth of the economy (pp.). Thus explaining, how important
the economy market is, as it enables the market and society to grow and increase in value.
Marxs however, didnt consider the issue of money and credit into his theory.

Siobhan Kerr. 4527044

Liberal Arts. City Flinders
VU20751 Economy and Society
Assessment 3- Essay
Marxs second theory regards, crisis is about the theory of under-consumption. Marx
concluded that with an under consumption it would start a labour oversupply, leading to the
fall of wages causing profits to increase. As profits increase in the market, the demand for
products decreases and business result in a build up on products.
Lastly, Marxs idea was concerning the transition and replacement of capitalism by socialism.
His theory was that in order to transfer into socialism the working class had to take a great
deal of action as they are being exploited by capitalism. Marxs recognised that the people
had the upper hand in order for it to happen. Workers would have freedom through creative
labour and not see work as it has no end, if socialism was introduced. In Heywoods Political
Ideologies (2012) it cites, once in power, socialist parties would be able to carry out
a fundamental transformation of society through the process of social reform
(pp.116). This pointing to Marxs theory that society would become more advanced and
workers of the society would not be alienated and treated unequally.
Marxs ideas enabled him to point out how wealth, power and class all impact on the
economy and society during the 18th and 19th century. His theories explain how Capitalism is
unfair, unstable and will lead nations into crisis as there remain conflicts in the economic
market. Marx looked at capitalism from a historical, materialist and dialectical view. On the
other hand, as a result of capitalism wages and living standards began to rise and the
working class developed a range of institution that protected their interest within society.
Therefore, the outcome of Marxs ideas and views was that capitalism would be overthrown
by socialism. His three key ideas about class struggle and conflict, economic crisis and
transition to socialism were all caused by exploitation in capitalism. Marx had big dreams
that involved an equal society with a stable economy.