According to chapter 4, Karl Marx’s ideas are based on distributive justice and political constraints on economic outcomes. The majority of countries around the world are facing several issues regarding distribution, since the capitalist systems under which we are currently functioning have proven to enhance the concentration of wealth in the hands of few individuals, something many people are against and which makes some of Marxism ideas gain relevance again (even if the system by itself has proven to fail). The term exploitation, an intrinsic concept of Marxism, refers to inequitable allocation of resources. According to Marxism, the capitalist exploiting workers is a common practice and the level of exploitation depends critically on the abundance of labor. As a result of this, the distribution of wealth in an economy depends on the relative scarcity of different factors of production.
In the case of Mexico, where we have excess supply of labor (undereducated and cheap labor in its majority) we can see the extent of “exploitation” by capitalists and the huge wealth concentration that has happened throughout the years. Whenever capital and labor are substitutes, even to some extent, a less extreme allocation of surplus from production would be able to prevail at equilibrium. The bad news for our country is that one of our relative competitive advantages is the existence of abundant cheap labor, which has enabled us to excel in labor-intensive industries in comparison to countries like the United States and Canada (as can be seen in the industries each of the three countries have specialized as a result of NAFTA). According to an article called “Mexico labor costs continue to attract US companies”, companies leaving the US routinely report lower Mexico labor costs as the deciding factor primarily driving their decision. This is something that could start to change if Trump’s Fiscal Reform takes place, but as of now it is still a reality.
As final remarks, Marxism holds that any positive reward to capitalists is unjust because capitalists do not contribute anything to the production process, something that if it was put into practice it would almost eliminate investments and technology improvements as we know them now, among many other things. I don’t necessarily agree with Marxist conclusions but I do believe that many economic systems around the world have proven to fail (including both, Marxism and capitalism) and we have to understand and try to choose the best from both systems (and well as from others) to try to create a more just and equitable one.
Reference to the article: “Mexico labor costs continue to attract US companies. Tecma University. Web. March 23, 2017. https://www.tecma.com/mexico-wages-labor-costs/.