Karl Marx is one of the most controversial economists in history. His writings are studied and debated all over the world. He is considered the founder of communism and such association has caused incredible bias against him. Marx’s association to communism was established due to the fact that numerous

Marx attempted to achieve the social welfare promoting equality and fair income distribution. However in reality such models are considered oppressive and will in most cases lead to violence. The human race was intended to be equal yet wealth creates huge gaps among social classes. Wealth provides education and education consequently brings power and culture which in the long run will grant the rich the decision to maintain their wealth or get richer. On the other hand the poor starts from cero and even though there are ways to make it but it will be a much greater challenge. There are no doubt revolutionists such as Karl Marx and Adam Smith have proposed extremist ideas that are not feasible in our current society yet such ideas have aided greatly in the evolution of our economic and social structure.

As the few capitalists increase their wealth, the gap between the rich and the poor must widen. The size of the working class (Marx refers to them as proletariats) grows in number, but their individual wealth is stagnant. The relationship between the two classes is a control relationship of the capitalist over the worker. This is not a great improvement over the relationship between the feudal lords and the serfs. In the best case scenario a capitalist economy prospers to the point that wages are driven up. We can see that even the best possible situation for the working class does not greatly improve their situation. The material position of the worker may rise slightly, but his social position continues to decline. Marx refers to the manner in which a capitalist controls the worker and collects the rewards of his labor as “exploitation of the worker”. The capitalist exploits the worker by using him in the production of goods and using the profit that was generated by the worker’s labor for his own gain. We will look at how this is done, but first we need to understand how the value of a good or a commodity is measured. By gaining that understanding we can then look at the value added to a product by the laborer and what portion of that value is rewarded to him.

It is often said that in capitalism it is in the best interest of the worker and the capitalist for the capitalist’s ventures to succeed because if the venture does not succeed, the worker nor the capitalist will achieve a reward. However, when it does succeed it is the capitalist who has the opportunity to increase his wealth and it is in the capitalist’s best interests that the worker not be given opportunity to earn more than the subsistence wage he is being paid. The growth of the business under capitalism will logically benefit a select number of capitalists. The few who are fortunate enough to have wealth have the opportunity for their wealth to grow. On the other hand the worker is not as fortunate.

In order to try to understand such capitalist- worker relationship one has to analyze the way the wage was determined. The same principles that determine the price of goods also determined the wages. The way Adam Smith described it on his Theory of Markets: Supply and demand determine the quantity of a good or service produced as well as the price. Subsequently after this information is known the capitalist determines the wages. We may then assume this changes trigger fluctuation in the cost of labor and consequently the fluctuations revolve around the cost of producing labor. The costs can be described as the cost of maintaining and training the worker. The easier a worker is to replace or the less training required to educate a worker, the smaller his wage. If there is little or no training necessary, a worker’s wage will equal the subsistence wage (the minimum amount necessary for a worker to survive). In addition to the subsistence wage, the capitalist must also consider the cost of replacing worn out workers. The addition of such cost to the subsistence wage is what we know as the minimum wage. Although many workers do live and work for a w

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