Definitions of Theories of Marxism & Capitalism

Definitions of Theories of Marxism & Capitalism thumbnail
Economic theories play a large role in the fiscal function of a nation.

The political and economic theories of capitalism and Marxism are complete opposite views of how the economic structure better serves a nation. Capitalism believes in a free market economy, where competition will support citizens. In contrast, Marxism, also referred to as Communism, believes the economy should be highly regulated.

  1. Capitalism

    • Capitalism is an economic theory in which the means of production and distribution of capital goods are owned by private citizens or corporations. Investments are determined by private decision, prices, production and distribution of goods determined mainly by the free market.

    Capitalism History

    • Adam Smith is credited with being the first to mention and support capitalism. Smith theorized on the benefits of capitalism in his book, "An Inquiry into the Nature and Causes of the Wealth of Nations." His book theorized that individuals would respond to the incentive of greater earning by specializing in a field, resulting in a stable economy regulated by an individual's desire to succeed.

    Marxism

    • Marxism is an economic and social system based upon the political and economic theories of Karl Marx and Friedrich Engels. Marxism is the antithesis of capitalism and is often referred to as communism. The theory states goods and production are determined by public ownership as a whole entity and that every person owns a piece of the economic structure.

    Marxism Theory

    • Marxism believes capitalism leads to the oppression of the proletariat, the working class. The proletariat work their whole lives to support the wealthy lifestyles of the bourgeois, the wealthy. This disparity of wealth will lead to an uprising by the proletariat to take control of the government and implement reforms to give power to their own class. This unbalance will create unrest and a form of government of communal resources.

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