Inequalities under Neoliberalism: Was Karl Marx right?

Karl Marx in his writings on capitalism during the Industrial Revolution in the 18th century observed that there was an emergence of class stratification – the bourgeoisie who own the means of production and the proletariat who exchange their labour for a wage (labour cost) and produce products of value (labour value) (Callinicos, 1996, p. 129). Marx in his theory of surplus value drew upon a class conflict in that the bourgeoisie exploit the proletariat to maximise profit, as the value produced through their labour exceeds the cost of their labour (Allen, 2011, p.31). This proletarian exploitation and subsequent lack of freedom and control relates to Marx’s theory of alienation - whereby the worker feels estranged from the product and the labour process (Honneth, 2017). By looking at contemporary income inequalities under neoliberalism and its ties to health and environmental outcomes, as well as the inequalities in emotional, physical and mental wellbeing. This essay will establish the extent to which Marx’s theories of surplus value and alienation underpin these inequalities.

Marx’s theory of surplus value is of great utility in outlining contemporary inequalities under neoliberalism, particularly in the United Kingdom (U.K) and the United States (U.S). Emmanuel Saez (2007) found that contemporary income inequality has far exceeded that of even the stock market value surge in the 1920s. This surge in inequality can be seen as a progression through the decades, with the proportion of income received by the top 1% in the U.K. increasing from 6% in 1980 to 12.5% in 2000 (Therborn, 2012). This complements Marx’s theory in that the value produced by the proletarians labour has increased, however, their labour value has remained stagnant through time thus producing an increased ‘surplus value.’ Therborn (2012) found that this increase can also be found in the U.S over the same time period – with the 1% experiencing an increase in the total household income from 8% to 17%. While Marx’s theory outlines the foundations that underpin this inequality, the dimension of political influence on surplus value is not included. Saez (2017) in a study on laissez-faire political policy and income inequality, found that U.S and U.K. corporate tax cuts from 70% to 28% under Ronald Reagan and from over 90% down to 40% under Margaret Thatcher, had profound impacts in exacerbating this wealth inequality between the classes by maximising corporate surplus value, through minimised tax deductions. This was compounded by the suppression of trade union powers under Thatcherism, which were seen to impede on the Governments free market ideology, ultimately meaning the proletariat had very little power to fight for wages, and better conditions and hours (Towers, 1989). These exacerbating inequalities under neoliberalism extend beyond income with manifestations in health outcomes, as seen in Therborn’s (2012) study which draws upon the idea that continual exploitation of the proletariat under harsh conditions and unhealthy jobs drive inequalities in life expectancy. With a continually increasing disparity of 0.15 years per year since 1980 in the U.K. This trend is mirrored in the U.S with Singh and Siahpush’s (2006) study on socioeconomic status’ relation to life expectancy, finding that between 1980 and 2000, the gap between the bourgeoisie (high status) and the proletariat (low status) grew by 1.8 years. This appears to be symptomatic of capitalism in a more globalised context, with life expectancy disparities between the socialist regime in Cuba and the restoration of capitalism in Russia at around 17 years (United Nations, 2007). This health outcome inequality between the classes was analysed by Wilkinson and Pickett (2009, p.75) who found that one dimension of the issue was the fact that the ruling class have far more accessibility to medical care (particularly in the U.S, but also quasi-privatised systems) and healthy living initiatives. Thus, drawing on Marx’s theory of surplus value in that the ruling class, through profit generation have far more capital to advance health in comparison to the working class whose labour cost does not grant them such privileges.

These health inequalities are not limited to income disparities, with ties to Marx’s concept of alienation which acts as a determinant of health. Bosma et al (1997) identified that a social gradient exists between the levels of control - such as planning, dictation of work speed - a worker has in the workplace (alienation degree) and their health experiences – both physically and mentally – due to the long demanding hours of robotic labour, often in very poor conditions. This is echoed by Martikainen et al (1999) who found that there lies a synergy between one’s hierarchical position and their physical and mental health outcomes. Which as argued by Forbes and Wainwright (2001) pertains to Marx’s theory of alienation, which subsequently outlines a contemporary health outcome inequality between the classes. Further manifestations of alienation can be seen in Hochschild’s work on ‘emotional labour’ in the service sector whereby workers’ emotions are adapted through transmutation to form a false set of emotions which serves as a product of the company (Hochschild, 1983). Airhostesses in Hochschild’s study described this identity, such as smiles and emotional care, as being a choreographed and an alienated product to orchestrate the moods of the consumers (Yuill, 2005). In terms of the ramifications of this continual emotional labour, Hochschild also outlines that airhostesses are often left feeling emotionally drained, burned out and an overwhelming feeling of self-erosion due to this adopted identity for capital gain (Williams, 1998, p. 754). While the service sector was not as prominent during the Industrial Revolution, the contemporary relevance of alienation still stands, as despite Hochschild’s study concerning alienation from self-identity, the social relations are no different to industrial capitalism (Callinicos, 1989, p. 127). Whereby the proletariat are subject to great emotional depletion through this alien identity, which subsequently draws upon an inequality, as the bourgeoisie impose, but do not partake in such labour.

This exploitation to accrue wealth extends beyond the worker, with multinationals exploiting natural resources and ecosystems, particularly in peripheral nations, posing major issues for local tribes and communities. In terms of oil, Marques (2020) found that Africa’s largest oil producer Nigeria has had its ecosystems dismantled by large oil companies – Shell, Mobil, Chevron, Elf, and Agip. Shell has caused significant damage, with 550 million gallons of oil leaked into a Nigerian Delta between 1960 and 2010. This is echoed by the Nigerian Department of Petroleum Resources who found that, between 1976 and 1996, 1.8 million oil barrels were spilled in the Niger Delta (Marques, 2020). This poses major survival issues for indigenous groups in Ogoniland, as these oil spills have destroyed many farms, streams and community fishing reservoirs (Boele et al., 2001). As well as chronic oil pollution of the air, with the United Nations Environmental Program (2011) finding carbon levels to be 900 times the recommended amount in air samples. This capital exploitation has ultimately been permitted by the Nigerian Government who have systematically failed to enforce environmental standards which include quick oil spillage responses to avert further environmental damage and pollution (Konne, 2014). Which as seen in the United Nations report, the socio-environment has been exacerbated to such an extent that it would take around 30 years to re-establish these ecosystems (Marques, 2020). On the other hand, revenues generated from this exploitation lie at around $30 billion, with minimal amounts given to support the indigenous communities (Konne, 2014). While this means of exploitation was not predicted by Marx, in his writing he did propose that capitalism will constantly undergo diversification by seeking new markets (Berman, 1999). With the generation of surplus value by the bourgeoisie through exploitation remaining an underpinning of capital diversification. Meanwhile, as profits sore - small communities are left completely destabilised with little funds to amend or soften the damage.

In conclusion, Marx’s theories of surplus value and alienation are overall of great utility in understanding contemporary income, environmental and health inequalities globally. With the mass surplus value accumulated by the bourgeoisie, this enables mass investment in healthcare which helps to interpret the social gradient in income and health outcomes between the classes. Another interpretation can be seen in the degree of worker alienation, primarily due to the conditions and demanding hours imposed by the bourgeoisie on the proletariat. This extends to an internalised battle between the true self and the self-shaped by capitalists in the service sector to maximise consumer experience and eliminate competitors, leading to undermined emotional wellbeing. While Marx’s surplus value theory underpins this exacerbating income inequality in the Western world, the political influence – as seen under the Reagan and Thatcher administrations, through corporate tax cuts and suppression of proletariat powers, is not brought into focus in Marxian theory. Despite ecological destabilisation not being directly theorised by Marx, he did theorise that the nature of capitalism in its search for profits would result in diversification, with exploitation remaining pertinent as corporate profits are prioritised over the health and living standards of indigenous groups in the developing world.