Reference no: EM131582485

The Liberal and Marxist Arguments for Imperialism

Unique to Market Capitalism

Different from the political, conservative, and social-psychological theories

Time-Bound to the Modern (post 1500) period

1. Market Capitalism leads to increasing concentrations of income

Capital is favored over Labor

Rewards flow to the owners of capital

2. Over time, the decreased incomes at the lower end lead to decreased consumption

The rich buy only a relatively constant amount of "ordinary" products such as food

The poor are the primary consumers of these "ordinary" products

The owners of capital, however, rely on a growing market

A shrinking market reduces the profitability of capital

3. At some point, decreased consumption leads to underconsumption

Underconsumption occurs when there is insufficient demand to sustain a growing market

Demand goes down and bankruptcies occur

The Great Depression is an example of underconsumption

4. Expansion abroad can delay the problem of underconsumption

By producing abroad one can lower the costs of raw materials and sell products at a reduced, but still profitable, price.

By producing abroad one can lower labor costs and sell products at a reduced, but still profitable, prince

By controlling markets abroad, one can capture new consumers

Britain and the Indian textile market

Britain and the opium market in China

5. Marxists argue that expansion abroad is the only solution to underconsumption

Liberals suggest that there is a second way to solve underconsumption: redistribute

The New Deal is an example of redistribution

Marxists do not believe that the rich will ever allow themselves to be taxed

The owners of capital control the state as far as the Marxists are concerned.