Tag: capitalism

  • Marxism Theory : History, Figures, and Main Ideas in Political Economy

    Marxism Theory : History, Figures, and Main Ideas in Political Economy

    When we talk about socialism or marxism, we will often come into contact with the concept of liberalism. Not because these two ideologies have much in common, but on the contrary, these two ideologies are completely opposite. In fact, the emergence of Marxism is none other than his rejection of the ideas of classical liberalism proposed by Adam Smith.

    Marxism itself is also closely related to socialism, because the two are often considered to have the same basic concept. However, socialism and marxism are fundamentally different . Marxism is an ideology based on the teachings of Karl Marx. This is why it is called Marxism or the teachings of Marx.

    Socialism is a form of idea or thought that existed long before Marx. The ideas in socialism talk a lot about togetherness and collectivism. Even so, there are teachings about togetherness that make the two seem attached.

    That is why, discussions of socialism will usually be divided into three groups , which include:

    1. socialism before Marx;
    2. Marx’s socialism (Marxism);
    3. socialism after Marx (Deliarnov, 2005).

    Discussions about socialism can be done through various perspectives, ranging from philosophy, ideals, movements, politics, teachings, ideology or political economy systems. However, this time our focus is on socialism from the point of view of political economy.

    From the point of view of political economy, socialism is a social system based on the principle of commune or togetherness, with the nature of distribution and ownership of the means of production or collective means of production . So, the most prominent character of this socialist society is its togetherness.

    In its most extreme form, socialism can develop into a form of communism, in which various economic decisions are drawn up, planned and controlled by the state.

    History of Marxism

    The era of industrialization has indeed brought major changes in the world economic system, including the emergence of new thinkers, such as Karl Marx (1818-1883). The ideas of Karl Marx are not really fresh and new ideas. What Karl Marx was trying to bring up was actually the idea of ​​togetherness in a commune, just like the socialist thought.

    However, Marx himself more developed the idea of ​​socialism in the form of a system. This is why, when talking about socialism in the form of a system, what is often used as a reference is the teachings of Karl Marx in the form of Marxism.

    So, here it can be seen that the basic difference between socialism and Marxism apart from their originators, lies in the line of thought. In socialism, the line of thought is broader based on the concept of togetherness. Whereas Marxism emphasizes more on how socialism can be realized in a comprehensive system in people’s lives.

    The history of Marxism itself was driven by the development of industrialization after the industrial revolution in England. Many of Karl Marx’s thoughts are a form of refutation of the classical liberal-leaning thoughts, which build their economy based on the market mechanism.

    Through his ideas, Karl Marx is called the main pioneer of the scientific socialism movement. The beginning of Marx’s popularity began when he published his first book together with Friederich Engels, the financial supporter of Marx.

    The book is entitled Communist Manifesto in 1847. In this book, Marx expresses a series of criticisms of Adam Smith’s ideas along with the concept of capitalism that he carries. This book also describes the conflicts between classes. Marx also said that the state is an instrument of oppression.

    Apart from the Communist Manifesto, Marx’s ideas are also included in many other books, all of which lead to socialist concepts. One of the most popular works of Marx is a book entitled Das Capital, which was published in 1867. It was Marx’s works that eventually became the basis for the emergence of Marxist ideology or Marxism (Deliarnov, 2005: 52).

    In fact, Marx himself never explicitly stated the ideology of Marxism. The concepts of his thought were also never designed into an ideology or ideology called Marxism.

    The term Marxism as a new ideology began to be developed after the death of Marx in 1883. Marx’s thought which was quite interesting began to be summarized as a new ideology which was given the name Marxist by German thinkers (Ritzer, 2005: 478).

    Because of this history, the concept of Marxism is often difficult to define precisely. What can be concluded is that basically, Marxist teachings try to harmonize reality, theories and concepts of thought in the life of an ideal society, through the commune system (Albert, Hahnel, 1991: 13).

    It should be noted that the philosophy of Karl Marx took a lot of dialectics developed by Hegel in 1818 as a basis. What Marx took from Hegel was about the philosophy of idealism and history.

    In Hegel’s philosophy, it is explained how social turmoil relates to the future of civilization. It was Hegel’s thoughts regarding the cycle of historical change that later inspired Marx’s ideas. Marx thought of a revolutionary concept in shaping the theory of society (Chilcote, 2010: 114).

    Scope of Marxist Ideology

    Mainly, many criticisms of Karl Marx were directed at Adam Smith’s idea of ​​deifying the market economy. In his attempt to criticize the idea of ​​capitalism, Marx used many foundations from various disciplines. He tried his best to prove that the ideas of capitalism are actually ” rotten from within ” ideas and are a reflection of an unfair system.

    Various disciplines used by Karl Marx in challenging the thought of capitalism, including:

    1. From a moral point of view, Marx claims that capitalism inherits injustice from within. This is based on capitalism’s indifference to the social inequalities that arise in society.
    2. From a social point of view, Marx stated that capitalism is a source of class conflict. This conflict can arise between the bourgeoisie and the proletariat, between the landlords and farm workers, and between the capitalists and their workers. This happens because one party acts as a suppressor ( oppressor ) and the other party as the oppressed ( opressed ).
    3. From an economic point of view, Marx views capitalism as a tool of capitalists which is solely used to obtain as much profit as possible, even if by suppressing the workers as hard as possible.

    Marx who uses various glasses to present his ideas is what makes Marx’s concept of ‘socialism’ more comprehensive. Marx also thought that the approach to the deductive procedure he used was far superior to that of the classical economists.

    Marx and his followers believed that the world should be understood as an integrated superior unit. Based on this, Marxism offers an idea or system based on the totality method, and not just a mere economic foundation.

    Marxism’s Critique of Capitalism

    As explained earlier, Marxism emerged as a response to Classical thinkers. Therefore, the teachings of Marxism are also based on many forms of criticism of the teachings of the Classical Liberals, especially against the teachings of Adam Smith in the form of capitalism.

    Marx saw capitalism as a system with many weaknesses. Here are some of Karl Marx’s critiques of capitalism, which at the same time illustrate how the mindset of Marx’s ideology is.

    # Capitalism creates classes in society

    Marx believed that the formation of social classes in society was the impact of capitalism. Capitalism forms classes based on economic aspects. The most obvious is the emergence of the ruling class and the working class or workers.

    # Capitalism makes the distribution of wealth unequal

    The rulers who want to make as much profit as possible tend to suppress the workers. In the end, the workers only receive wages that can only be used to survive.

    Marx based his thinking on Ricardo’s theory which proposed a low wage rate. Ricardo stated that in this subsystem of capitalism, such a low wage rate is determined by a value that can only be for survival.

    This form of so-called ” iron wage ” or iron wages is only equivalent to the cost of fuel for the machine to work, or as much as “the cost of animal feed”. This means that the remuneration given to the owners of capital or capitalists is much greater than the remuneration for the owners of labor or labor.

    The owners of capital will be getting stronger and richer, while the owners of labor will be getting poorer and weaker. Capitalism tends to distribute wealth unequally. Until in the end, this system also gave rise to stratified power (Deliarnov, 2006: 42-43).

    # Capitalism allows the ruling class to exploit

    In economics-oriented capitalism, the ruling class or capitalists will try to make as much profit as possible. The greater the efforts of the capitalists to seek profit, the harder the pressure is exerted on the workers.

    That is, this concept allows the ruling class to exploit the workers. In other words, according to Marx, capitalism is a form of exploitation of workers.

    # Capitalism triggers class conflict

    Marx believed that state capitalism would side with the rulers. Why is that? This is because the economically ruling class tends to have the potential to gain political power. This is because money or wealth is considered a form of power.

    This “rotten from within” capitalist country has an unfair system. Capitalism triggers class conflict. One side acts as an oppressor (oppressor) and on the other side there is an oppressed ( oppressed person). This happens because the capitalists will make as much profit as possible by suppressing the workers (Deliarnov, 2006: 41-42).

    # Capitalism makes workers experience alienates

    The system created by capitalism makes the workers experience alienates . Workers who are used as means or tools to meet the needs of the capitalists, will tend to be exploited in order to complete their work as quickly and as well as possible.

    In the end, workers will only focus on their work and have minimal interaction with social life or with other humans. This forces workers to be isolated and unable to grow. In other words, workers are alienated from their basic human nature (Ritzer, Goodman, 2011: 36).

    # Capitalism is Self Destructive

    Marx rejected the notion of the Classics which stated that capitalism is a system that is considered self-sustained ( self- developing). In the eyes of Marxism, capitalism is more referred to as self-destructive ( self-destructive ).

    This condition occurs because the pressure of the capitalists on the workers is so great. This convinced Karl Marx, and even stated his prediction that there would be a revolution of the workers.

    In order to make as much profit as possible, the capitalists will put more pressure on the workers. Workers who are increasingly pressured by these capitalists will certainly not remain silent. There will be resistance so that in the end, this system will self-destruct (Deliarnov, 2005: 42).

    Karl Marx’s Ideas

    The strength of Marxism is in the system it offers, which is all-encompassing. That is, the ideas of Karl Marx have a comprehensive discussion and have interconnections in all types of existing social institutions. Marxism also shows the interconnection between politics and economics.

    This is why the teachings of Marxism are considered the most comprehensive teachings in the concept of political economy. This all-encompassing concept led Marx to believe that his teachings were far superior to the deductive approach of classical political economy.

    # Dialectical Materialism

    Marx carried out an analysis of political economy by combining dialectical methods and materialism. By Engels, this is called dialectical materialism or historical materialism. The view that the world is a single integrated unit makes Marx’s approach able to cover everything with the totality method.

    This conception of Marx’s dialectical materialism draws on Hegel’s thoughts regarding the cycle of historical change. Marx stated that there would be a revolutionary concept in shaping the theory of society through the struggle of the workers to overthrow the rulers, and in the end the formation of all classless society.

    Even so, Marx rejected Hegel’s idealism which stated that these changes were most influenced by ideas. According to Marx, what is more decisive is the power of materialism.

    # Materialistic

    Marx’s materialistic conception is a form of political subordination and the decisions of public authorities under the inherent power of operating in society. Simply put, materialistic ideas are what determine everything, whether in terms of politics, culture, social, morals, philosophy, as well as ideology, is ‘economic’, namely material .

    More simply, matter is the center of life. The material conditions the process of political, social and intellectual life in general. So, when we talk about the mode of production of life, we will focus on the economy. This economy is then able to influence various other modes of life, from various aspects. This also includes, the economy influences politics.

    # Politics is a medium to exercise power and authority

    Politics, power and material things are basically related. However, the most powerful influence is material. According to Marx, politics is only a tool or media used by the authorities as a medium to exercise and legitimize their control.

    Meanwhile, according to Marx, the role is to exercise power and authority, which is influenced by material things. The state must play a role in preparing the political conditions and pressures necessary to maintain each mode of production (Staniland, 1985).

    In linking politics to a market economy, Marx believes that there is a domination structure in every economic organization. Politics for Marx is only a bridge for the ruling class to legitimize its control in order to obtain materials (Deliarnov, 2005: 44).

    # Country Removal

    According to Marx, the expansion of wealth is the same as the expansion of power . This makes Marx believe that wealth is not only used in the concept of power to , but also power over . The power possessed by the capitalists will be used as much as possible to suppress the workers, so this must be abolished.

    The state is only a creation of civil society which is used solely to protect the interests of the ruling classes. This affects the occurrence of conflicts of interest between classes that encourage conflicts between classes or conflicts within the State. Marx proposed that both the state and the ruling class should be abolished (Chilcote, 2010: 148).

    # Co-ownership is replaced by collective distribution

    Capitalism must be immediately replaced with a social system based on collective ownership and distribution (Deliarnov, 2005: 42). In a Marxist perspective, economic change is capable of transforming the ideological superstructure. Human actions depend on changes in the economic structure (Chilcote, 2010: 161).

    # Leaders of the proletarian class to form an authoritarian state

    Marx’s analysis states that the existence of classes is only tied to certain historical phases in the form of the development of production. For this reason, it is necessary to form an authoritarian state to ensure that the historical revolution takes place properly.

    To form an authoritarian state, a leader from the proletariat or the working class is needed. In order to lead to this dictatorship of the proletariat a class struggle is necessary. By itself, this dictatorship will be a transition to the abolition of the entire class.

    According to Marx, the existence of this class must be abolished. In the end, the state will also be abolished. The world will be a single unit without class and without state.

    # Elimination of classes in society

    The social situation will lead to the realization of a classless society, where private property rights to property are abolished. For Marx, the existence of property rights is indicated by the ownership of goods and income opportunities. In fact, this is a hallmark of the existence of class in society, so this must be abolished (Chilcote, 2010: 171).

    The development of Marxism

    Marx after the era of Karl Marx is still experiencing development. Many other thinkers have tried to develop the ideas of Marxism by being seasoned with various other ideas in order to perfect the system that has been offered by Karl Marx. One of them, there is Lenin.

    From the thought of Marx and Engels, Lenin put forward the theory of the State which he expressed in the book State and Revolution in 1932. Lenin argued that the state at that time was a form of manifestation of irreconcilability of class antagonisms .

    Therefore, state power had to be abolished by violent revolution. A form of effort through compromise and reformist solutions is considered unable to solve these class antagonisms (Chilcote, 2010: 259).

    The proletariat is tasked with carrying out the struggle against the state and its instruments of power. The next power is held by the proletariat. The modes of production are then transformed from private ownership to state ownership.

    This transition of capitalism power will then give rise to a form of proletarian government or dictatorship of the proletariat. Bourgeois democracy turned into proletarian democracy. So in essence, the reform aims to establish prosperity for the proletariat.

    The functions of the state will eventually be handed over to the people, until there is no longer a need for this kind of power. After the development of production reaches the highest level, the existence of class is no longer needed. Likewise, the state must also be abolished.

    The function of the state will be replaced by control by the whole community. As a result, people will work voluntarily according to their abilities and receive according to their needs. This is where socialism was created (Chilcote, 2010: 260).

    Criticism of Marxism

    Just as Marxism critiqued the Classical Liberals, it seems that Marxism is not free from criticism. Not a few thinkers claim that the teachings of Marx are not ideal teachings, and even have many shortcomings. Some of the criticisms leveled against Marxism are as follows:

    # Impressed Dogmatic

    After the era of Karl Marx, there were thinkers who carried out critical theory. This critical theory is one that criticizes Marxism. According to critical theory, in general, Marxism has a weakness because this ideology simply imitates Marx’s analysis outright. Karl Marx’s words were used as ideology and tried to be applied to modern society.

    It is this direct application that makes Marxism as an ideology more dogmatic than scientific. The analysis offered by Critical theory itself is a reconceptualization of the basic theory of Karl Marx, namely the liberation of humans from various shackles of oppression.

    # The idea of ​​social revolution occurs automatically is irrational

    According to Marx, capitalism which is “rotten from within” will automatically be destroyed by social revolution. This social revolution carried out by workers will occur automatically, so that in the end it will replace the capitalist order by itself.

    This idea is considered by revisionists as a weakness of Marxism, and seems excessive or irrational. The idea that the collapse of capitalism can happen automatically is irrational.

    Moreover, when referring to the view that socialism will only emerge when capitalism collapses, this means that as long as capitalism is able to maintain its surplus value , this social revolution will not automatically occur.

    Described by Bernstein, as long as countries that support capitalism are still successful in maintaining various anti-monopoly policies and free markets, then capitalism is not on the way to destruction. To put it simply, to expect a social revolution to happen automatically is an exaggeration or even irrationality.

    # Too deify Materialism and ignore ideas

    Marx’s concept of materialism too idolizes matter as part of the economic aspect. In fact, Marx ignores the importance of ideas or ideas and their contribution to history. Marx argued that reality is material and that social revolutions can occur mainly because of this material aspect.

    Material or economy is the only thing that is important and becomes the standard of human life, not thoughts or ideas. Marx’s attitude that put every interest only as part of economic interests is considered excessive and illogical.

    Marx believed, directly or indirectly, that political power is a tool for the benefit of the function of economic power only. Likewise in social and cultural conditions, all are based on a materialistic perspective.

    In his perspective, Marx stated that the historical and revolutionary forces of society are not determined by ideas or ideas, nor are the ideals of freedom. The absence of ideas or ideas, and the attitude of being too deifying of the material is what makes Marx’s teachings widely criticized.

    Reference :

    1. Albert, Michael, Robin Hahnel. Marxist and Socialist Theory . Ho Chin Minh: South End Press.
    2. Deliarnov. 2006. Political Economy . Jakarta: Erlangga.
    3. Your shaft. Tt. Tracing Marxism through the Thoughts of Karl Marx . accessed from http://www.porosilmu.com/2014/12/menelursuri-marxisme-via-pemikiran.html
    4. Ritzer, George and Douglas J. Goodman. 2004. Marxist Theory and Various Neo-Marxian Theories. Bantul: Offset Discourse Creation.
    5. Ritzer, George. 2005. Encyclopedia of Social Theory . New Delhi: Sage Publications.

     

  • What is Capitalism? Definition and Characteristics

    What is Capitalism? Definition and Characteristics

    Ideology is an idea, thought, or principle that is owned by an individual or group of people. This time, we will briefly discuss one of the ideologies which was also coined as an economic system, namely capitalism.

    Capitalism upholds individual ownership of the means of production and distribution used to gain competitive advantage of the characteristics of capitalism. In the mid-20th century, capitalism was growing, supported by advances in technology and information.

    What is Capitalism ?

    The theory as well as the economic system of capitalism is estimated to have first appeared in the late 18th and early 19th centuries. Capitalism was present when the economic system at that time was still under the mercantilism economic system, namely an economic system in which there was a lot of government intervention, especially in matters of restrictions on economic activities aimed at increasing export activities and limiting import activities.

    Here are some very important meanings in capitalism as follows:

    • Capitalism is an understanding that was first coined by figures including Adam Smith and David Ricardo.
    • The origin of the word Capitalism is “capital” which generally means “profit” or capital, while the suffix -ism is a term that describes a way of life that has become a principle or habit.
    • Therefore, capitalism can be interpreted as an ideology that emphasizes capital in a commercial ownership or in an economic activity. Capitalism is an ideology that supports personal interests.

    Characteristics of Capitalism

    The economic system of capitalism can indeed provide large profits for the owners of capital or the means of production, but in reality capitalism opens the gap to social inequality that is getting bigger. Sometimes profits are only obtained by the elite who are better able to compete and survive, while the lower middle class still experience difficulties in meeting the capital needs to carry out the production process. So that the capitalist economic system can be said to be not fully in favor of the welfare of the general public. According to one source, in general capitalism has three characteristics, namely:

    • Right to private property,
    • The right to raise capital and obtain maximum profit with minimum capital,
    • The right to compete in any way between the owners of capital.

    Meanwhile, in particular, Capitalism is characterized by the following:

    • Recognition of individual property rights over factors of production including natural resources.
    • There is freedom to own private means of production. This causes a lot of production tools and capital such as factories, machines, raw materials which are owned by private parties individually or in groups in the form of companies.
    • Every individual is free to try in any way and compete with each other for maximum personal gain, one example is establishing his own company. In the economic system of capitalism, humans are seen as creatures who always seek profit for themselves or homo-economicus. One of the principles of capitalism is to get maximum results with minimum capital. These characteristics can be a gap for the negative impact of capitalism, because for the sake of pursuing profit, someone can justify all means, including even bad ways.
    • The production process is the full responsibility of private entrepreneurs and they are free to determine what will be produced, how many goods will be produced including the price that will be charged on the production. But in a capitalist economic system, prices are more often determined by market supply and demand.
    • There is a free competitive market, which is where supply and demand play a major role in the market mechanism, for example in determining prices. This is related to the “Invisible Hands” theory proposed by Adam Smith. That supply and demand as a market mechanism seems to be an “invisible hand” that can manage economic problems, such as inflation and unemployment without realizing it.
    • Does not recognize government interference in the country’s economy. In a capitalist state, the government only acts as a ‘night watchman’, that is, it can only regulate the economic process but cannot limit the ownership and economic activities of the owners of capital.
    • The capitalist system encourages the formation of an individualist attitude based on the nature of materialism.
    • The number of individuals who are hedonistic. This is because the owners of capital will take all the attractive ways through various depictions of products or services through advertisements or other mass media that aims to attract market interest, and this is often successful. Consumers are continuously ‘fed’ with various attractive advertisements with various product advantages that will make consumers decide to buy it without thinking.

    Capitalist Economic System

    Whereas what is meant by a capitalist economic system is a system that gives economic actors the freedom to do everything possible with the resources or factors of production that they have individually, so that they can compete optimally with these resources or factors. other production. This economic system frees everyone to have resources, work, try and compete with each other to meet the needs of life, without interference from the government. So there is a lot of competition between business entities.

    According to Adam Smith, the main elements that must exist in a capitalist economic system are:

    1. Private Property Rights Both Individuals and Groups.

    Capitalism liberates and gives everyone the right to own the factors of production including resources in a legal way. In addition, the owners of capital are allowed to compete in any way to achieve large profits at small costs.

    2. Invisible Hand as Regulator of Economic Activities.

    The invisible hand is a theory coined by Adam Smith, who says that there are “hidden forces” that regulate the course of the economy through the mechanism of supply and demand. These forces are also a motivation for the owners of capital.

    3. Economic Individualism

    Namely, the limitation of government power on economic activities so that individuals can carry out economic activities independently without any government intervention.

    4. Free Competitive Market

    Capitalism can also give birth to individuals who only pursue profit without paying attention to the quality and benefits of something that is produced because it is only made based on market demand. In addition, capitalism can also give rise to monopolies on the means of production or capital. The mechanism of demand and supply that occurs causes the formation of a free competitive market.

    In conclusion, capitalism is an ideology as well as an economic system that prioritizes individual freedom to own the factors or means of production, forms a free competitive market through the mechanism of supply and demand, and does not recognize government interference in economic activities. A brief explanation of the meaning and characteristics of capitalism. Hope it is useful.