Karl Marx, (1818-1883) a German economist restrained from aligning himself with the ability of creation of long term growth by the industrial revolution due to the accumulation of capitalistic proceeds, on which growth depended, obviously.
According to Karl Marx, industrial revolution married with technological development would birth production or more and more machineries. This birth however, in production line, affects labor, which is the productive factor that transforms raw materials into finished goods. Wage rate as well as labor falls due to increase in capital accumulation, showing a negative relationship between the latter and the former duo. Profit fuels the entrepreneur’s carts. Considering the increase in capital formation, profit level also has to be monitored. Since both work hand-in-hand,in order to keep both profit and accumulating capital on the good path, wage-rate is visited, which ensures that it gets low. This will eventually lead to low demand for labor, thus breeding two unemployed chicks; the unemployed because capitalist have subscribed to machineries for production and those who lost their job due to the invasion of machines into the production cycle. To keep body and soul together, some have to work at a level even below minimum wage.
Marx posited that the current wealth accumulated by the fat cats was built from the exploitation of the growing reserve army of the employed. He added that “awon capitalist ma fi owoara won se ara won” on the basis of the capital he had accumulated. This wasn’t far fetched as Marx referred to a time when the unemployed bracket will revolt and overthrow the “few”. Although the cycle has not been fully completed, but evident is the ever increasing figure of legs and hands that are frequently being driven away from their work-post to be replaced by some lifeless but more productive machinery even in developed economies. On the other side is the regular street demonstration, though vivid in the latter but more prominent in the third world countries by labor unions, my country as an example.
Truly, rapid growth is desirable;however, some long term negative effects and consequences will not elude the development process, if really such an economy yearns for growth, especially “inclusive”, which graduates into development. Growth would I say is limitless or not? Because resources are scarce in every economy, relative to ever increasing wants. To produce more of a particular product, will mean reduction in the production of another item, especially if they require almost the same input-bundle to have a final product. Some workers are even displaced owing to their inability to quickly adapt to the new technology, aside from those who automatically lost their jobs when the machines came on board. This broadens the affectedinto three pegs; those who got retrenched on the arrival of technology, those who got retrenched because of their inability inadapting to engaging the devices into the production cycle and those who according to Marx, were automatically outside the circle.
Urbanization and industrialization with their adverse effects on the pattern of living things and their environment. Everyone I presume should be aware of though a recent topic, but very relevant, which is climate change. Today is 27th of March, 2016 and I wrote this from Kwara State. Those in that part of the country can describe how the weather was in mid February, compared to what today’s temperature displays. Felling of trees, which originally should serve as wind breakers, we all know the cost. Even affecting the wildlife cycle, has led to environmental imbalances in some places in the world. When species in wildlife are hunted down several times, their date of extinction only draws near. Evenhunting of lesser animals on the food chain, simply takes away the food from the table of the higher consumers. The smaller level will be decreasing at the same time the bracket of consumption of the higher animals reduces. Frequent pollution of water, land and air courtesy of globalization and industrialization. You would not put a factory on a forest without having some caterpillars running in their midst first, would you?
Income disparity is prevalent in right hand economies due to national income which is not accompanied by equitable distribution of resources. You can log into National Bureau of Statistics or make enquiry from Dr. Yemi Kale about Nigeria’s current GINI-coefficient. This often grows into social tension, though if not managed would eventually make Karl Marx a prophet.
OYEKAN O. DAMILOJU is a Nigerian, an undergraduate economics student.