Marxism and the Global Political Economy

When looking at the global political economy from a Marxist economic theory, the world is divided up into two opposing camps: an exploited and an exploiting class. Hence, many Marxist theorists view the political, social and economic structure, in which we operate, as not fair but rather oppressive. Within the northern sphere of the world, the rich are getting richer and the poor are getting poorer. There are little advances and opportunities for the working class, who struggle to keep up with their rent and their bill payments, while the corporations and companies that they work for exploit their labour in order to earn greater income. On a global scale, the divide between the north and the south is also increasing. This is attributable to unfair conditions in many trade agreements between the two spheres that have been set up by wealthy countries in order to maintain control over others. Hence, when analyzing the IPE from a Marxist economic theory many unjust power relations become apparent that seek to maximize the wealth of the exploiting class, while undermining the control of the exploited workers.

Cohn explains that the Marxist view “sees government (i.e., politics) as responding in a rather passive manner to socioeconomic pressures” (104). In contrast with the realist perspective, the state acts as a secondary international player, while the ruling class, in the form of corporations and other financial institutions, control the global economy. All major decisions and actions are solely based on the prospect of wealth, rather than politics. Van der Waal and Burgers argue in support of the polarisation thesis, which states that “the most service-oriented urban economies create the most job opportunities at the bottom of the labour market” – (van der Waal, and Burgers 693). Hence, in our economies within the northern sphere there are numerous work positions that require hard labour and are financially not very rewarding. Individuals are employed as waitresses or janitors earning a minimal wage because we have small production sectors within our economy. Most raw material excavation, as well as the production of parts for larger products are completed overseas, where it is much cheaper to obtain the same manufactured goods when compared to here. Therefore, individuals in the north sphere face a decreasing demand in the production sector of the economy and rather find employment in the service industry that only offers them low wages. This set-up of our economies are attributable to the influences of transnational corporations, who are able to pose as key players in the world.

On an international scale the presence of an exploited class becomes more apparent. Globally the exploiting actors are transnational corporations and other financial institutions that help solidify and deepen the divide between the northern and southern spheres. From a Marxist perspective, these international players are highly political and know how to lobby and influence governments to support their interests. These companies are very powerful, and some of them, such as Walmart for example, have larger annual incomes than some minor states. Sklair argues that in fact, “TNCs have always been political actors” (145). This opinion makes the Marxist perspective very different from the Realist view, which supports the notion that all power rests within the state. Sklair elaborates furthermore that “TNCs do work, quite deliberately and some-times rather covertly, as political actors and often have direct access to those at the highest levels of formal political and administrative power with considerable success” (154). The primary goal of these entities is to make a profit and increase their wealth. The only way to do so is to increase their incomes and lower their expenditures. Therefore, it is always a corporation’s goal to keep the wages of their employees to a minimum, so that their net incomes are enhanced. The “North-South distinctions remain as central as ever, particularly in shaping processes of world-state formation” and “since the possessors of capital continue to be overwhelmingly concentrated in the North, while a vast and ever-growing majority of the world’s proletariat is concentrated in the South, the two struggles are in good part obverse sides of the same coin” (Arrighi 475). This is the Marxist reason for why the North-South divide exists.

On an even more concentrated level, some argue that the separation between the two global spheres is actually increasing and that the exploited class has little to no chance of breaking this vicious cycle. The Dependency Theory states that “advanced capitalist states either underdevelop LDCs or prevent them from achieving genuine autonomous development” (Cohn 108). It is simply in their interest to suppress the exploited classes, so that they can secure and guarantee their own wealth and well-being. In addition, Cohn explains that “although LDCs may have been undeveloped in the past, they became underdeveloped as a result of their involvement with core countries” (109). Nowadays, their economies simply depend on trade with the North. For example, a large part of Mexico’s economy is dependent on the export of corn into North-America. When corn prices rose during the end of the twentieth century, trade decreased and Mexico found themselves in deep, financial troubles because they relied on their sales so much. Therefore, some may argue that the North-South divide has purposely been created and that major international players are working hard in order to maintain this divide for their own benefit.

However, a growing amount of criticism and denigrations from Marxist theorists are calling the current global economic model into question. Exploited classes are raising their voices and demanding an ever increasing level of economic justice. In addition, it is questionable whether the current system of our economy is sustainable in the future. Sklair urges that “the crises of class polarization and ecological unsustainability that are direct con-sequences of capitalist globalization make the search for alternatives to capitalist globalization urgent” (156). The South is already fighting back by creating their own trade agreements and uniting forces in order to present a stronger front against the North. Maybe it is just a matter of time before drastic changes will shift the current power relations and economic imbalances, which is exactly what Marxist theory would hope for.

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