Income Inequality: Request of Marx's Theory

  • Cuneyd Sahin

History of Economic Thought


Karl Marx; in the primitive times of the mankind, it is said that everyone has to do the same work which is hunting-gathering to be able to ensure a standard living. The lack of private property and the division of labor back those times attracts Marx. So there were no classes or course exploitations. All people contributed and benefited corresponding to their abilities. First exploitation system is presented with the slaves who served to nobles. From then on, land possession and peasant romance followed in feudal times. After the collapse of the feudal system the capitalist system (bourgeois-proletariat) grows. Marx assume that the capitalism until collapses, will spread throughout world since it is almost a trading opportunity of everything for humanity. The fact that capitalism and industrialism will bring wealth which only be awarded to capitalists who will exploit the people in the modern culture and put it to use for profitability. Marx examined the changes in social class structure to be able to comprehend systems like capitalism by means of modes of production.

Marx assumed that interpersonal order is actually based on the development of monetary goods. What's goods are produced, how they're produced, and exactly how they're traded all determine the differences of people's riches, power, and sociable position in the society. The pushes of production are the technology and the means of working that people use to create the items they need. All social life depends upon people's ability to eat and drink, house themselves, and clothe themselves. When people meet their needs, they develop new needs. Industrialism is a drive of development.

Capitalism is the sociable relationships that individuals form when then participate in monetary life (these connections are called relations of creation). An important difference between relations of development in Feudal life and in Capitalism is that class structure plays a greater role in Capitalism. In feudal life, serfs were servants to nobility, and their relationship was clear to both serfs and the servants. But in Capitalism, there is an essential inequality between classes, though it disguises itself as equality. Labor is sold by staff to capitalists in a free market (like work comes by employees to employers), so it looks like the employees and the capitalists are identical. It looks like the staff and the capitalists are both openly choosing to be a part of the financial exchange. But the worker will not freely prefer to get part of the romantic relationship with the capitalist for income labor. The elements of the overall composition reflect the hobbies of the bourgeois. Regarding to Marx, faith, law, and the state of hawaii are all manifestations of the bourgeoisie's electricity. Marx thought that their state was just an expression of the flexibility of private property from the community. The state is the ordering of bourgeois relationships of production. The law is the representation of the bourgeois form of property. The main thing to look for in an financial system is circulation of power between the various classes, and the connections between the various classes. When makes of development change, the mode of production must also change, since each set of productive causes has its set of appropriate class relationships. Competition and unity can both characterize the same school, making completion very brutal among capitalists. The bourgeoisie acts all together to protect itself when property relationships are threatened, so when the bourgeois category itself is threatened.

Marx's social classes are characterized by conflict. Each class acts in its own interest, and towards the other classes. When settings of creation change, inequality shifts. Culture can go from having one kind of school inequality to some other type. Additionally, it may go from a modern culture with classes and inequality to no classes whatsoever. Individuals in just a course are hostile towards each other, as they are opponents. They only share a common fight in fighting against one another (Giddens and Held, 1982). Vitality plays an enormous role in these individual relationships. Vitality is defined as the ability of one group to get another group to consider some desired action, usually by consent by sometimes by force (Holmes, Hughes & Julian, 2007). Karl Marx assumed that individuals keep their own vitality in culture, which is packed with inequality caused by classes. Hurst (2000) said that individuals become enslaved when they are being controlled an outside pressure which benefits capitalism. In summary, while market exchanges can happen to be good, they are really actually conditioned by the dissimilarities in the relations of production. Capitalists do not necessarily buy the labor of employees, nevertheless they buy worker's skills and capacity to produce value. The employee receives wages in exchange for value-producing labor. The worker actually produces more value because of their time than they get money for this same time. Labor electricity produced value greater than itself. The consequence of a day's worth of work has more value than the salary that the worker earns during that day. The surplus value not accounted for by the income earned by the worker is taken by the owner of the capital, or the company, since he possesses the method of production; this is exactly what Marx called the exploitative character of capitalist relations of creation. Marx assumed that those who own the means of material development also own the method of social relations of production, since their ideas "unintentionally reproduce the power that rules over them" (Holmes, 2007).

So this ambition to possess power led to the times of the robber barons, rich organizations which ruled the country and the contemporary society. For instance; corrupt politicians were servants to the rich. To be able to channel these vitality from selfish hands, there is needed a powerful corporations, regulations by federal government. The Gilded Get older is took its name by the materials of life which is based on the countless great fortunes created during this period. During the Gilded Get older, between 1860 and 1900, the U. S. current economic climate underwent tremendous growth. There is an explosion of new professional and agricultural technology. On farms, agricultural output was increased by the technology of steam tractors and the cotton gin. In factories, steel development was radically increased by the invention of blast furnaces, which induced the expense of steel to lessen and demand to increase. This resulted in the extension of the American railroad network. The benefits of standardized rail sizes made building railroads more efficient, similar to how the invention of interchangeable parts revolutionized clothing and car sectors. As production increased, so have the growth of companies, which made goods for the growing metropolitan market segments. As more businesses were started out, giant firms began taking over and competition increased. Prices fell, and there started being increased disparities in wealth. This was triggered by new businesses developing "pools, " and attempting to erase markets by agreeing on development levels and prices. The American abundant held getting richer and the poor get poorer. While using vast economic progress, large companies have grown in terms of shares, plus they have worked to diminish their competition. Large companies used cheap labor with their advantage, in order to increase their revenue. Steel developed a significant role in the American economy, as its price lowered and demand increased. Material life has changed entirely. Industry stored expanding until the staff in the coal mines continued strike. There was plenty of employment in mining, even though it was very dangerous work. Big businesses constrained miner's basic worker's protection under the law, as well as human being rights, and they ignored the workers' needs for higher revenue. Marx mentioned that the ever-growing but seriously oppressed working class will, at some point, turn on their capitalist oppressors.

As a result the deadliest hit in American history is occurred, the reason why for the reach were difficult and bad conditions for individuals. The conditions in the mines impact not only the staff but also their own families as well. At the end, more than %90 of the workforce has gone on affect. Hence without the staff in the mining sector, the current economic climate was effected badly. The government performed a couple of different roles through the strike. The government started a attack with the coal miners which includes led to many deaths and arrests for the staff also. Outcome of this it concluded in the defeat of the unions. The other final result of this there some employees were imprisoned and many were wiped out and injured during the strike. In the long run, it was a disaster for the labors. To begin with, the government should have taken action prior to the conditions that led to abuse of staff member. Because at the end it resulted in the current economic climate and the industry to put up with. Since personnel have been working really in bad conditions, getting low wages, giving up on a few of their basic human being rights to make a living in a deregulated market due to capital flight out of the country and the quick industrialization. So as we look to situation over time we can say for individual protection under the law it was an important milestone in order to put into action labor protection under the law and union privileges. The real final result is that it can be related to the theory that is against totally free markets that will eventually lead to monopoly. So it will be chaos in the end. So there should always be a electricity of control of the federal government to be able prevent these kind of situations.

There was an function of developments in the economy in order to improve some conditions that was called Progressive Motion. The beginning of the Progressive movements slowly brought about improvement. In 1903, the Section of Commerce and Labor was set up, which included a Bureau of Companies to completely clean up organizations. The improvements made to economic and public problems are referred to as Progressivism. Progressivism provided people with education, basic safety, and better workplaces. The Progressive Period spurred President Roosevelt to determine the Federal Team of Labor, to get workers. Individuals became more aware of their protection under the law, and the press started spreading media about hits and other actions. Labor output increased as circumstances better. These and a great many other acts, reform worked in the brief run to recognize what was taking place, however in the long run it turned out exactly like capitalist system to become powerful. After World Battle I and World War the ambition to have power returned to just how it always has been. The capitalists were the success of this situation and extended to abuse worker in order to increase their earnings rates. The income inequality increased and held increasing significantly.

The graph above implies how income income between 1975 and 2007 were in OECD countries by using the World Top Incomes Database. As you can see, in a few countries like Denmark almost all income gains went to the bottom 90 percent and sent out equally. However, almost half of U. S. income benefits would go to the richest one percent. Because of this super-rich getting super-richer. The reason behind this high percentage of income increases for top 1% is that it's expected to allow them to create job opportunities in the economy which called 'trickle down' system. But, it doesn't look like that the nation's "wealth designers" are creating prosperity not for anyone else but limited to themselves. That is why the inequality gap between quartiles are increasing and the prosperity is not evenly distributed but compiled at the very top 1-5% income earners in the united states.

This is another graph above reveals the income of share of top 10% in US between the years 1917-2012. In this graph we can clearly see that the income of top 10% is higher except the Golden Age which is in between the years 1942-1977 earnings of top 10% is frequent and there is low inequality. The graph also implies that capitalism has created inequality among population since it includes based on success also to increase profit the expenses have to diminish and it'll result in decrease in pay and also exploitation of labor.

This graph on the other shows this exploitation better in which it can plainly be observed that through the years the true income of workers were regular and regular however their production have a tendency to increase. This indicates that by less employee, capitalist achieves to get high labor output with the aid of technology and capital build up. So the space in between the true income and labor output goes directly to capitalists' pocket as income. As the gap widened the income inequality will grow and the indegent is going to get poorer and wealthy is going to get richer. The ideology of Marx is based on equal society which is working alongside one another to accomplish everything, however the repercussions of capitalism is far away from what Marx considered.

In realization, Marx aspires to break down this class structure helped bring by capitalism. Everyone dreams up a system to meet their needs equally. Marx tried with all of his thoughts and activities in order to get rid of the exploitation of the peoples to liberate the community throughout his life, he worked on behalf of freeing individuals by freeing world. The prediction about capitalism is the fact that the existing relations of creation will obstruct the ongoing development of professional production and in the end, there will be no revenue in their further exploitation though social need will stay. The ever-growing but intensely oppressed working course will, sooner or later, turn on their capitalist oppressors. If the working class does indeed turn up against the capitalists, a trend will occur that will have the power to bring about the finish of capitalism. Although no changes have happened yet, capitalism gets more powerful every day, working class is suppressing every day, union volumes are decreasing every day. Capitalists are generating higher profits by going abroad and exploiting labor. Marx's dream of a perfect equivalent culture without exploitation seems to be on hold for now.


Giddens, A. , & Held, D. (1982). Classes, electricity, and conflict: Classical and contemporary debates. Berkeley: University or college of California Press.

Hurst, D. E. (2000), the Janus-Faced Mother nature of Modern culture. Living Theory: The use of Classical Public Theory to Modern Life. Allyn & Bacon. Boston

Holmes, D. , Hughes, K. , & Julian, R. (2007). Australian sociology: A changing population. French's Forest, N. S. W. : Pearson Education.

Piketty, T. , & Saez, E. (2014). Inequality in the long run. Technology, 838-843.

Organization for Economic and Co-operation Development, retrieved data from www. oecd. org on 23 June.

U. S Bureau of Economic Examination, retrieved data from www. bea. gov on 23 June.

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