Marx and related philosophical concepts

Marx's theory of alienation has to do with the partition of things that rationally belong together. According to Marx, alienation is a widespread consequence of capitalism. Marx's theory of alienation is based upon his view that, inside the capitalist manner of manufacture, workers again and again lose the ability to determine lives and destiny because their right to foresee themselves as the manager of their dealings is taken away. Workers become independent, self recognized people, but are diverted into goals and activities that are set down by those who have the power. Alienation in capitalist societies takes place because the worker can only express this basic social aspect of individuality through a production system that is not communally, but privately owned (Marx, 2007).

When applying Marx's theory of alienation to the current issue of income inequality in the global world one can see how it is possible that capitalism has led to the issues at hand. "Although not a new phenomenon, globalization is on the rise, and with that, the concentration of authority among few multinationals. By the early 1990's, the world market share of the top five companies in each industry amounted to almost seventy percent for consumer durables and fifty percent for automotive, airline, aerospace, electrical, electronic and steel industries" (Liard-Muriente, 2005). Throughout this time world financial output traded between countries went up from about nine percent to nineteen percent by 1992. At this same time, about seventy percent of all world trade was being done by around five hundred companies. A major concern when dealing with globalization in general, is the pressure that this phenomenon puts on nations to alter their customs, norms, and social values (Liard-Muriente, 2005).

The argument that globalization income inequality rests on the notion that the balance between labor and capital is a key determinant of income disparity. A lot of people presume that labor power decreases inequality. It has been shown that globalization deteriorates labor by creating an international labor pool. Regional incorporation and globalization frequently are connected in academic and popular discussion because both entail the strengthening of financial, political, cultural, and community flows that traverse nationwide boundaries. There are three main differences between regional integration and globalization. The first is that regional integration is geographically bound. Globalization is often defined as the intensification of cross border surges, and the boundaries traverses are any national borders. Regional integration also entails the intensification of international communication within bordered regions. The geographical boundaries of regional integration is pertinent to the effect of economic integration on income inequality because political institutions and human capital stocks should be more comparable within than between regions, creating more powerful market competition within than between regions (Beckfield, 2006). This is a good example of Marx's alienation theory in that once the scale tips in favor of the capital side of the equation a tremendous inequality results.

An initial look at the association between economic integration and national income inequality produces evidence of an affirmative effect of financial integration that weakens or even reverses at the uppermost levels of economic integration. This finding is consistent with the historical growth of political institutions that guard workers against the weight of global competition. "Corporatist bargaining that organizes the state's macroeconomic policy, labor unions' wage demands, and corporations' employment decisions stabilize the national economy against the vicissitudes of international markets. Strong welfare states protect workers against economic vulnerability through generous unemployment benefits and training programs" (Beckfield, 2006). The expansion of markets to the regional level from the national level-should increase income inequality as workers are exposed to the wage competition of a larger labor pool, but this effect may be dampened or even reversed at very high levels of regional economic integration, because those economies are stabilized by strong welfare states and corporatist institutions (Beckfield, 2006).

It appears that this phenomenon of income inequality has begun to level off in recent years. Firebaugh (2007) was among the first to note that income inequality for the world as a whole levelled off in the last decades of the 20th century, after rising for more than two centuries. While global income inequality is immense, it has continued to be fairly steady or has even declined somewhat in recent years. This is thought to be due to brisk income growth in certain areas of the world. Firebaugh's findings disputed earlier claims that global income inequality continues to rise quickly. According to Firebaugh (2007), "those claims are flawed because each country is looked at as if they were equal, despite vast differences in population and size. When populous countries are given their due weight, the data show that global income inequality has not gone up sharply, and most likely is not rising at all."

In most things in the business world Marx's inequality can be seen as an underlying theme. Most people who work for a company have a boss to whom they must answer to on a daily business. This inherent power imbalance often creates alienation just as Marx suggests. When one person has all the power and authority over another there will also be income inequality in that relationship. It is this imbalance of both power and wealth that creates the alienation that exists in this business relationship.