Marxism is a political theory founded on the works of Karl Marx that seeks to explain the negative effects of capitalism and how it has impacted upon labour, workers, and economic development (Investopedia, 2019). As a theory, Marxism can successfully explain global poverty, defined as “the number of people living on less than $1.90 a day on an international level" (The World Bank, 2016), through the argument that the bourgeoisie (the upper class) are intent on exploiting the proletariat (the working class) to gain capital (Socialist Party NI, 2018). It is estimated that 689 million people worldwide live under extreme poverty, making it a pressing political, economic, and social issue on an international scale (World Vision, 2020). The purpose of this article is to critically analyse the effectiveness of Marxist theories in explaining the prevalence of global poverty by drawing links between poverty and capitalism, using examples such as immigration, wage inequality and imperialism. This article will also seek to examine the weaknesses and criticisms associated with Marxism as an explanation for global poverty and inequality.
It is commonly argued by a number of political and social theorists that under a capitalist system of government, inequality is inevitable; and indeed, levels of inequality are increasing globally (Muller, 2013). For example, in the United States, the number of employment opportunities has grown in recent years yet levels of poverty have continued to rise, as have levels of exploitation and inequality within the workplace experienced by the population (Luna, 2016: pg 67-82). Marxists will argue that this is due to the capitalist system which allows for the exploitation of the working classes. Workers sell their labour under Capitalism for a lower price than the worth of the goods they are producing, thus enabling the upper classes to maintain their capital and power, whilst keeping the working classes under their control (Stanford Encyclopedia of Philosophy, 2016). This theory can be supported by a number of examples; one such example relates to the wage gap.
Wage Gaps and Inequalities
Research carried out in 2019 by the organisation Inequality.org found that the top 3 richest men in America held a combined total of wealth that was worth more than the poorest 50% of Americans. Their research additionally uncovered that America had the highest wage discrepancies between the richest and poorest of the population in the developed world (Inequality.org, 2019). Furthermore, studies have shown that women and minorities are more likely to experience discrepancies in relation to their wage. In 2020, PayScale released a report detailing how women in America earn an average of 81 cents for every dollar earned by men. This gap is more prominent for minority women, such as Native American, Black and Hispanic women, who earn 75 cents for every dollar earned by a man (PayScale, 2020).
While these statistics provide clear evidence that there are large pay discrepancies between the richest and the poorest - as well as men and women/minorities - in America, it is important to acknowledge that America is not an isolated case and that these wage gaps exist globally. However, these figures do clearly support the Marxist view relating to worker exploitation within a capitalist system; wages are a reflection of the level of power held by the worker, as opposed to their productivity level, so low wages reflect the powerlessness of the working classes against the upper classes (Reeves, 2019). Low wages will inevitably lead to an increased level of poverty, which in this case is referred to as 'in-work poverty'' since low wage jobs are often unstable, resulting in employees being unable to fully support their families financially (McKnight, Stewart, Himmelweit and Palillo, 2016). Therefore, it can be argued that the low wages associated with capitalism play a large role in the creation of poverty, both on a national and international level. Thus, Marxism is able to successfully explain this outcome through its views on worker exploitation and the power held by the Bourgeoisie over the Proletariat.
Unemployment and Global Poverty
Moreover, when assessing the strength of Marxist claims that capitalism is the biggest factor leading to global poverty, one must examine levels of unemployment and the impact that this will have on levels of poverty. Despite close links drawn between the theory of capitalism, productivity and the world of work, it is often argued that capitalism fails to present enough employment opportunities for all citizens in any given state. It essentially “creates unemployment” (Patnaik, 2019; pg 303-316). One such explanation of how Capitalism creates unemployment is based on employers’ constant attempts to increase their profit margins. Often machines are introduced to replace manual labour, eliminating the need to pay employee wages (Harriss-White, 2006; pg 1241-1246). This tactic ultimately leads to redundancies and engenders an increasingly difficult milieu for those without a job to find stable employment.
Unemployment is a global issue, with unemployment in the UK sitting at 4.8% and at 6.9% in the US (Office For National Statistics, 2020; Bureau of Labour Statistics, 2020). Economists have noted that there is a positive correlation between high unemployment levels and high levels of poverty (Ukpere and Slabbert, 2009; pg 37-46). This argument once again supports the Marxist explanation of poverty. By living under a system that directly causes high unemployment levels, poverty becomes a common feature, and capitalism’s global nature serves to strengthen the Marxist view that global poverty is a product of capitalism.
The Impact of Property Rights on Poverty
A further argument in support of the Marxist view that global poverty can be blamed on Capitalism is related to property rights and how they are of benefit to the richer members of society. 'Homesteading'' is a theory first put forward by philosopher John Locke, wherein if a man discovers unowned property and builds on it, the land becomes his (Block, 2008). While this is not possible in the contemporary world, homesteading has taken on a modern form through inheritance and the passing down of family assets, such as property, land or money (Ross, 2019).
Such property rights can be linked to global poverty, as members of the population who live in poverty often lack assets that may generate income - namely property. Findings from a UN research project carried out in 2009 looking into the links between property and poverty, found that in Bangladesh those with less than 0.2 hectares made up two-thirds of those living in poverty in the country. The project also discovered connections between landlessness and near-landlessness in South Asian countries and levels of poverty (Meinzen-Dick, 2009). These findings show there is a significant correlation between property ownership and poverty. Therefore, it can be argued that the property rights associated with capitalism - namely the inheritance of property - allows for the bourgeoisie to maintain power over the proletariat by ensuring they have more capital and that the proletariat are unable to escape poverty, just as Marxist thinkers suggest.
Immigration
Immigration, defined as “the act of someone coming to live in a different country” (Cambridge Dictionary, 2020), has been increasing on a global scale for a number of years, with figures showing 270,000 people immigrated to the United Kingdom in 2019 alone (Sumption and Vargas-Silva, 2020). Extensive research has been conducted with the aim of understanding why people may choose to immigrate. A study carried out by the University of Cambridge suggested that the most common reason is for work, with 71% of those who choose to move to the UK doing so with the aim of finding employment (Kierans, 2020). This suggests that a large portion of those who choose to resettle in a different country do so in an attempt to improve upon their quality of life and to improve their financial state by escaping poverty. Immigration draws close links to capitalism, in that capitalist societies often encourage immigration, to a certain extent, as it provides a cheap labour force that will serve the interests of businesses aiming to make a high profit (Castles and Kosack, 2010; pg 23-25). However, those who immigrate to countries such as the UK to escape the poverty in their native country often find themselves once more trapped in the cycle of poverty in their new home. Immigrants are more likely to experience heightened levels of poverty due to the increased likelihood of them working in low paid and insecure jobs, while facing higher chances of workplace exploitation. Statistics show that, as of 2011, 35% of immigrants from countries outside of the European Economic Area will experience poverty upon migrating to the UK, while 18-20% of immigrants from within the European Economic Area will experience poverty (Pemberton, Phillimore and Robinson, 2014). Marxism is founded upon the belief that the bourgeoisie exploits the proletariat, primarily within the workforce, and the poverty experienced by economic migrants is a prime example that supports this form of Marxist thinking. The exploitation of immigrants for capitalistic gain is not only an increasingly prominent issue in countries such as the UK and USA, however, factories based in less economically developed countries (LEDCs) are often renowned for their poor treatment of workers - especially immigrants - so as to increase their profit margins. One such example of this relates to Syrian refugees who work illegally in Turkish clothing factories for extremely low wages (Clean Clothes Campaign, 2016), meaning they escaped conflict and poverty in their home state, only to experience poverty within the state they claimed refuge in. This example helps to further prove that as a theory, Marxism is able to explain the prominence of global poverty by critically analysing the effects of capitalism and proving it to be one of the key factors leading to high levels of poverty, in this case within the immigrant community.
In spite of Marxism proving to be a valid theory in the explanation of the poverty faced by immigrants, both in their home countries and the countries they have migrated to, Marxism fails to explain immigration for economic reasons from non-capitalist states. A historical example includes the poverty experienced by those living in Eastern Germany during the Cold War and the numbers of those who attempted to flee the state when it was controlled by the Communist USSR. This may demonstrate that Marrxism cannot fully explain the existence of global poverty. Estimates show that up to 1700 people attempted to cross the East-West border daily to escape the poverty they experienced under the USSR’s control (Blakemore, 2019), and other figures show that labour productivity in the Eastern bloc was at a third of the levels seen within the Western Bloc, and West Germany’s GDP per capita was twice that of East Germany’s (Becker, Mergele and Woessmann, 2020). The presence of poverty in states that follow the Marxist ideology, as well as the presence of economic immigrants, undermines the Marxist argument that capitalism holds the blame for high levels of poverty on both a state-wide and international level, as examples show that poverty is still prevalent in non-capitalist states, such as Cold War Germany. Therefore, it may be argued that Marxism is not the most effective theory in International Relations in explaining the high levels of poverty found globally, both historically and contemporarily.
Imperialism and Capitalism
Imperialism has been a common feature within international affairs throughout history, with the British Empire during the 15th-18th Century and the Soviet Union during the Cold War being two of the most renowned examples of colonial powers. Imperialism is defined as “a system in which a country rules over other countries… especially in political and economic matters” (Cambridge Dictionary, 2020). While imperialism has long been associated with capitalism, particularly by Marxist thinkers such as Lenin - who claim that imperialism and capitalism are one and the same (Evans, 1982: pg 124-163) - recent political theorists have presented the argument that there are in fact close links between decolonised states and global poverty, given the international aspect of imperialism and colonialism. One of the most prominent examples of extreme poverty within previously colonised states comes from the continent of Africa. Within his book, entitled ‘How Europe Underdeveloped Africa' (1972)’, the Guyanese academic and scholar Walter Rodney, blamed the underdevelopment of African nations on both imperialism, through the draining of resources and wealth, and on capitalist exploitation throughout the continent (Rodney, 1972: pg 27-28). These accusations by Rodney, however, are not unfounded and bare weight, even now, over fifty years after their publication. As a continent, Africa is often indisputably described as one of the most impoverished continents; one in three Africans live in extreme poverty and they make up approximately 70% of the world’s poorest citizens (Hamel, Tong and Hofer, 2019). This is despite Africa not only being a continent that is rich in natural resources, but also the fact that Africa is at the forefront of the mining industry. One highly effective way of understanding why Africa remains so highly impoverished comes from an assessment of Marxist theories relating to imperialism.
Marxist theorists typically describe imperialism as a late stage of capitalism that allows the facilitation of labour exploitation and for states to continue to increase their wealth at the expense of the native population (Sutton, 2013). This argument is reinforced through the use of a case study relating to mining in Zambia. Despite being one of the largest producers of copper globally Zambia continues to experience high levels of poverty, with 74% of the populations surviving on $1.25 a day, and 43% of the population being malnourished according to 2015 statistics. These discrepancies between the country’s potential wealth and its impoverished reality can be blamed on trade mispricing and tax avoidance from the multinational corporations who have shares in the Zambian mining industry (Lebert, 2015). This prioritisation of wealth and the exploitation of workers under capitalism is inherent in Marxist theory and its ability to explain the prominence of global poverty as a direct result of capitalist endeavours. Yet, it is also clear that the long-term effects of imperialism in states and continents alike have also had a considerable impact of global poverty levels. It is through this belief that Marxism as a theory is able to link both imperialism and capitalism with the pressing issue of global poverty.
Criticisms of Marxist Theory on Poverty
While the Marxist school of thought allows for a relatively effective analysis of why global poverty exists and why it is so common, both historically and contemporarily, there are a number of flaws associated with the narrative it provides. One such flaw is that Marxist thinkers often fail to recognise the benefits provided by capitalism and the ways in which such a society can be of benefit to those living in poverty. A number of large-scale corporations who have benefitted greatly under capitalism have used their profits to give back to those in both their local and international communities through charitable donations. For example, in 2017 the American business Wells Fargo & Company donated over $280 million to various charities, such as the American Red Cross and charities that help veterans (Greenwood, 2018). Donations such as the ones made by Wells Fargo & Company play a large role in helping people escape from poverty by providing employment opportunities, decreasing levels of homelessness and helping to provide education. Therefore, it can be argued that capitalism has actually helped in the fight against global poverty, as a result of large-scale companies donating large amounts of their profits to charitable organisations.
A further criticism of Marxism as an explanation for global poverty comes as a result of high levels of poverty in states that either currently follow Marxist ideology, or states that have done so in the past. Historically, Romania is a key example of poverty within a Marxist state. During the Cold War when Romania was under USSR control, attempts to repay foreign debt led to increased poverty, unemployment and food shortages within the now capitalist state (Stanescu, 2019; pg 107-144). However, following the collapse of the communist regime within Romania, the state has in recent years begun to see a decline in poverty. Poverty now sits at 15.6% as of 2017, compared to 28.4% in 2014. These figures show that communism led to a significant increase in poverty during the Cold War and suggest that while poverty remains a prominent issue in Romania, it is not as pressing an issue under capitalism as it was under communism. A contemporary example of a state experiencing high levels of poverty despite living under a Marxist government is Laos. As well as increasing levels of inequality within the state of Laos, 18% of the population of the state are also living in extreme poverty, with the numbers increasing among groups of ethnic minorities and households with low levels of education (The World Bank, 2020). While other Marxist states, such as Vietnam and China, who have poverty levels of 8% and 3.3% respectively, do not necessarily experience such high levels of poverty (Central Intelligence Agency, 2017). The presence of states such as Laos who have a high percentage of the population living below the poverty line undermines the ideology of Marxism and the effectiveness of the theory’s argument that global poverty is the result of capitalism. These statistics suggest that although capitalism has likely played a large role in allowing for such high levels of global poverty. It is not solely the fault of capitalism, as poverty still exists under Communist regimes. Therefore, political scientists must look for additional reasons behind why global poverty is so prevalent, in particular in non-capitalist states.
One of Marxism’s most renowned claims is that capitalism allows the bourgeoisie to profit off the exploitation of the workers. While this essay has sought to argue that the exploitation of workers within capitalist systems is one of the key factors behind global poverty, it must also be noted that there are a number of theorists who argue that the exploitation of workers is not an inherently bad thing. This perspective argues that, from the point of view of the worker, it will help them to escape poverty and improve their standard of living. Within Böhm-Bawerk’s book, entitled ‘Capital and Interest’ (1890), the Austrian economist argues that workers are not in fact exploited, due to the fact that they earn a wage before the product they are labouring to create has returned a profit (Böhm-Bawerk, 1890). This criticism of Marxism is widely respected in International Relations theory and undermines the Marxist view that the exploitation of the working class leads to their repression, and in turn leads to higher levels of poverty among the working classes. Thus, it can once more be argued that the Marxist claim that capitalism is the sole cause of global poverty is less accurate than often believed.
Conclusion
There is a large amount of statistical and theoretical evidence that suggests there are strong connections between capitalism and global poverty, as commonly argued by Marxist thinkers both historically and in recent years. Examples, including in-work poverty, globally high unemployment rates and the long-term effects of imperialism, serve to strengthen this argument. Despite a number of criticisms against the Marxist ideology, such as those from critics who argue that the exploitation of the proletariat is beneficial, or those who believe that the existence of poverty in Marxist states undermines the Marxist debate, the ideology is still able to provide both a strong argument against capitalism and a solid explanation for the prominence of global poverty. Furthermore, Marxist theory provides an insight as to how global poverty can be combatted, for example, by ending the capitalist exploitation of workers, and by redistributing global wealth.
DISCLAIMER
This work is an altered piece of work that was originally submitted as an assignment to Queen's University Belfast by the author, all efforts have been made to erase links to the original module in order to avoid plagiarism by other students in the future.
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