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History of Economic Thought

Marx’s theory of history and the weakness of it
Comparisons between Marxism with Mercantilist school.

Jirayut Monjagapate 59148010052

Jirayut.monjagapate@gmail.com

Marx’s theory of history

Marx believed that the bottom of the class or society has always been exploited,

especially labor class. This situation would put highly pressure on the social construction and

consequently lead to the social revolution. Marx did not illustrate this occurrence with a

concrete explanation. (Buntham, 2013). According to Brue and Grant (2007), Marx illustrated

the Exceed of Value as the following; the higher productivity of workforce which partially

caused to let Capitalists occur. The Capitalists may not occur if the productivity could have

been equal to workforce’s consumption. In other words, when workers were able to produce

outputs more than their consumption, this situation would lead to the circumstance of

exploitation of labor.

In Marx’ vision, society has been evolved through six stages (some scholars believed

that Marx demonstrated seven the evolution of seven stages). Marx’s theory of history

intentionally aims to demonstrate factors which cause changes in the procedures of production

historically. Additionally, the Marx’s theory of history is called historical materialism. The

historical materialism illustrates how societies have been organized from the pasts to current

time and possibility in the future.

First of all, primitive communism is a Marx’s model of socioeconomic society. There

is not hierarchical or capital concepts. Marx demonstrated that the primitive communism is

composed of hunting and gathering for cultural procedures of agriculture. It is hence a

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collective right to access basic resources without authorized regulations from social

relationships such as society (Misachi, 2017). To illustrate more, Brue and Grant (2007) have

stated that in the primitive communism, it is a common ownership, the productivity is in a low

level, and labor have to produce no more outputs than their needs.

Secondly, Efficiency of Production or Slave Society forces workers have to produce

outputs more than their needs. The slaves are considered as a profitability to owner. As a result,

exploitation of labor and confliction between different classes come out (Brue and Grant,

2007). According to Shimp (2009), classes came out. The powerful classes had ability to

control the surplus of production and also controlled the workforce class. The division of labor

had been under improvement. Unfortunately, immoral social conditions led low-class people

have a low life expectancy. In addition, this can be called as an Imperialism. It is the stage that

the strong people are deserved the right to regulate the rules. They start to own all land however

they are also intimidated by other strong people. This situation makes aristocracy occur

(Williams, 2013).

Move to the third stage which is feudalism. Feudalism develops from previous stage

from aristocracy to feudalism. In this stage, landlords are the owners and they have authorities

to use political and military implementations. The salves work for nothing but obtaining

necessities for living (Brue and Grant, 2007). Furthermore, as Shimp (2009) has states that

noble class tied labor class to their land. The labor class living in rural area worked or paid rent

to them. On the other hand, the class living in urban area may stick in guilds.

Fourthly, capitalism is a replacement of feudalism; land owners dominate society. The

capitalism is a relativeness between productions. Marx referred to social relationships

involving in economic life. The term relations of production are to utilize remaining raw

materials and innovations for production aims (Elwell, 2013). Capitalism boosts productivity.

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Marx also said that the procedures of production are concentrated and centralized, and the cycle

of private ownerships is becoming an obstacle to further development. It has also been pointed

out that the state is dominated under capitalists, and there is an increase in unemployment.

Capitalism makes new classes to replace feudal status (Brue and Grant, 2007).

Fifthly, in socialism, people can own private property. Nonetheless, capital and land

are owned by the government (Brue and Grant, 2007). The social structure of production is

relevant to public ownership. Economic base is a main determinant to tell the social conditions

such as cultures, laws, philosophies, and religions (Buntham, 2013).

Last but not least, in communism, production is proceeding without exploitation. What

citizens produce outputs and distribute to nation, they will definitely obtain it back according

to what they have distributed to. Marx emphasized on being equal. Individuals are not slaves

in several interpretable ways (Rosen, n.d.). Marx analyzed based on economic circumstances

because politics is seen as a confliction between different social classes which rooted from

conflict of interest. In capitalism, Marx believed that there are two classes in the society -

capitalists and proletariats. Marx’s intention is to eradicate capitalism. Without capitalism,

there will not be any class. All property belong to the central. Additionally, there will not be

exploitation from higher class (Buntham, 2013).

All in all, Marx’s theory of history can be used to explain states’ history. According to

Brue and Grant’s book, there are six types of productions: primitive communism, slave society,

feudalism, capitalism, socialism, and communism. In each stage, we can see the improvement

from less productive to high productive, and each stage benefits to particular class.

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Analyzing Marx’s theory of history

The weakness of primitive communism

In ancient pasts, as Marx mentioned to primitive communism is in where there is no

system of private ownership, no money circulation, no salary, no division of labor, and no

confliction between different classes. This is called the system of primitive communism (From

primitive communism to class society, n.d.). This would lead to an almost static state. In other

word, in a primitive communism state, there is no sufficient healthcare services to serve

citizens. Citizens may definitely not enjoy consuming good and services, as it has been

demonstrated that people hunt and gather for traditional procedures. Society as a whole,

therefore, may not provide citizens several commodities because they have what they have

made from natural only. In addition, there is no government structure and laws control society.

People living in a small community without exploring and sharing commodities like people are

doing nowadays results in locally limited resources assessments.

The weakness of slave society

In this stage, it would benefit to nobles and elite classes, and it unfortunately restricts

and takes benefits away from worker class. It has been mentioned that the surplus of production

would be beneficial to the authorities only. This makes workers become less motivated because

all benefits are given to the ruling class. In addition, some situations are retrospecting similarly

to primitive communism, maybe become worse than primitive communism because rights to

enjoy commodities are given to the small group of society. As Brue and Grant (2009) have

stated that salves receive nothing for spending time for work but necessities for living.

The weakness of feudalism

In workforce class, people have a hard time to live because their duties are set up by

noble class. According to Lombardo (2015), workers crop and work to support their nobles,
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their cultivation makes money for them. If there is no sufficient outcome, they may be

punished. The working class seems to have limited freedoms. Moreover, people in the

feudalism state have almost never traveled other regions. Lambardo also pointed out that they

would have a chance to go outside their area if their nobles would like to enlarge their regions.

This also makes each state become an isolated state. Outsiders are seen as hostile people. In

this case, consequently, it is hard that local people would possibly go outside.

The weakness of capitalism

When capitalism is being discussed, this would possibly link to social relationships

affecting economic life. Generally speaking, according to Pettinger (2017), capitalism is

determined by less government intervention, private ownerships, and market mechanism. Marx

believed that state is under domination of capitalists, and capitalism makes an increase in

unemployment (Brue and Grant, 2007). These result in trends of huge inequality. Some

capitalists may have a monopolistic authority. Benefits of society have been ignored by

capitalists because all capitalists try to gain more benefits to themselves. Furthermore,

capitalism makes inequality to societies which make obvious divisions of social class.

The weakness of socialism

As Buntham (2013) has pointed out that the majority of society which refers to an

economic base can determine the social conditions such as cultures, laws, philosophies, and

religions. Which means the state runs and provides social welfare based on majority’s interests.

In discussions of disadvantages of socialism, the idea is not correctly implemented, and it

seems to be an imaginary concept because, in reality, workers will have more rights to seek for

higher income with less productivity. Socialism makes people’s lives too convenient. This also

makes citizens become less motivated in their work. It may result in decrease in aggregate

nation’s outcomes (10 Biggest Pros and Cons of Socialism, n.d.).

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The weakness of communism

When Marx’s concepts of communism is talking about “being equal” and no

exploitation from the nobles. Government should have an absolute power in order to control

all lands and all productions. The government then distributes national resources to citizens

equally. Hoyt (n.d.) states that communism intentionally purpose to make an equality

throughout economic and social activities. However, similar to socialism, it leads to less

motivation because whether people produce productively or not, they will receive the same

amount as others. In addition, even all powers are taken away by the government. That can be

implied that government may be an arbitrary system governing the state, and bureaucratic

people could have more privileges.

Mechanism

In a summary of mechanism, according to Hunt and Lautzenheiser (2011), one

significant policy intentionally comes out in order to increase the value of exports and try to

reduce an amount of import is monopolistic trade policy. Mercantilists try to collect gold and

silver to have more money taking into their country. In addition, Brue and Grant (2007) has

demonstrated the major theories of the mercantilist as the followings: wealth is determined by

gold and silver. Plus, there is an ideology, specifically called nationalism. This concept does

not allow colonized countries to trade with other countries but mother country. However, the

mother country believes that in order to become wealthier, the surplus of export needs to be

implemented. Furthermore, raw materials are imported with a tax exemption, and the mother

country does not allow domestic businesses export raw materials. Additionally, the government

make monopolistically privileges to companies which are doing foreign trades. Brue and Grant

has also mentioned that mechanism make benefits to merchant capitalists, monarchies, and

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bureaucratic officials. These can be called as rent seeking behavior. Mechanism use a

terminology “zero-sum game” to do foreign trades.

Comparisons between Mercantilist and Marxism

There are many powerfully influential economists in the age of mechanism – Thomas

Mun, Gerard Malynes, Charles Davenant, Jean Baptiste Colbert, and Sir William Petty.

Profitability

In mechanism, merchants are seeking wealth to their own. All surplus of value has been

taken by monarchies, nobles, and merchants. Mechanism intentionally tries to gain wealthy

through monopolistic trades which means one side gain benefits and another side may lose. On

the contrary, Marx believes that all powers should be in governments’ hand. All productions

have been produced and allocated to citizens equally. There is no extra-benefit given to

particular persons.

Dimensions of Society

Mechanism occurs within the age of feudalism. There are several classes in the society:

monarchies, nobles, mercantilist, and working class. Nevertheless, the working class has been

treated unfairly. In an opposite way, Marx wants to demolish the class. Without any class, there

will not be cases of e10xploitation of labor and surplus of value will be granted to all people in

society not in the elites.

Equality

While in mechanism, Colbert looks at child population as uselessness. Monks, nuns,

and intellectuals such as lawyers are also seen as unproductivity. According to Brue and Grant

(2007), hard-working and low paid population are able to enter industry are favored by Colbert.
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In addition, people can be exempted from taxes if they get married early and they have more

than ten children in their family. However, Marx believes that individuals are not slaves. What

people have produced outputs and contributed to the nation, they will get it all. It is different

from Colbert that people are hard-working but low-paid.

Policy

In mechanism, Mun, Davenant and Calbert have a similar element in trade policy which

is a surplus of export. This policy makes nation gain more wealth. In contrast, Marx does not

concern on trade policy. He emphasizes on classes which can be inferred as a policy too. In

communism, government is a central, and all property belong to the state. All government

policies are to serve the citizens and nation. In other words, mechanism highly concerns on

profitability and the money gaining in the nation, but Marxism concerns on being equal and

the way to demolish class which can lead to unfairness of differences between classes.

Conclusions

In the first part of this essay, it is mentioned to the theory of history by Marx. It can be

called as historical materialism as well. There are six stages that Marx has demonstrated –

primitive capitalism is non structured government. People hunt and gather for their needs, slave

society is  that slaves are considered as a profitability to owners, feudalism is a development

from the slave society, capitalism is productivity seeking, last socialism and communism are

almost similar in terms of serving people. However, in communism, all poverty belongs to the

government. In socialism, some business poverty still remains to business owners. In the

second part, there are discussion for each stage because each has a unique and can be

implemented in different periods of time. Next, in the third part, it is a short explanation of

mechanism, mechanism is a rent seeking and trying to gain wealth to nation with monopolies

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and domestic policies which are beneficial to high classes and put pressure on working class.

Lastly, there are comparisons the differences between mechanism and Marxism. Marx is

focusing on equality by eliminating class, but mechanism is looking for business transactions.

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