Marx, Economic Growth and Development: Key Theories Explained

Marx (1818-1883) historically represented the relationship that existed between social classes and the means of production. Means of production: two factors: capital and labor. Their combination is also called relations of production (ownership of the means of production, which can be private or social; division of labor; distribution of wealth).

Structure: For Marx, the set of relations of production, composed of infrastructure, machinery and labor relations, changes from a capitalist system to a socialist one.

Superstructure: For Marx, the internal continuation of the structure, equivalent to politics and ideology, depends on the economic conditions in which each society lives. It is also the religious framework used to justify a given economic structure.

Social Changes: Dialectical Processes

Dialectical processes include contradictions in the relationship between humans and nature, contradictions between new and old productive forces, and contradictions between new and old relations of production.

Economic Growth and Development

Growth (from the bottom up) is the increase of all productive activity in a country. It is expressed quantitatively and implies advances in technology and science. Its measure is typically linked to GDP.

Development is the relationship between a country's growth and the human character of its society. It is expressed qualitatively and refers to equitable growth among the sectors of production.

Similarities: both seek a project to improve the country and are complementary.

Differences: one is quantitative and the other is qualitative. One is concerned with people's well-being, while the other is concerned with technology. Development is equitable within society.

International Economic Institutions

International Monetary Fund: oversees government finances to prevent crises and debts.

World Bank: promotes projects in countries.

World Trade Organization: promotes free trade between countries.

ECLAC (CEPAL): dependency and development of internal trade.

Economic Models and Theories

Stabilizing Development: an economic model used in Mexico between 1952 and 1970. Its foundation is seeking economic stability in order to achieve continuous economic development.

Peripheral Capitalism: an explanation of economic growth from the perspective of Latin American countries. It is postulated by the UN and consists of proposing different levels of development, because an alternative explanation of economic development was sought.

Continuous Growth: a growth theory that seeks technological development and endogenous growth. It seeks to explain economic growth based on what the school proposes. It is postulated by Paul M. Romer and Robert Lucas, and holds that technological change is the basis of growth.

Business Cycle: a theory that seeks to explain why cycles repeat. It is postulated by Eugen von Böhm and Friedrich von Hayek. It consists of growth through the increase of resources and the recovery of trends. Why cycles repeat has not yet been fully resolved.