A non-market economy, pioneered by early socialists like Karl Marx, a philosopher, radical socialist, and political economist is seen as the way to redistribute wealth uniformly to society. Its labor system is unitary such that people are seen to be driven by the desire to pull their ability or manpower together in order to contribute to society. With no individual monetary gain as a driving force, the people drive pleasure from working together.
Central management of resources is set such that the people can receive their portion of the national or regional resource or wealth. The trend is likely to increase since the system is seen as the only way to improve the general living standard of the people.
A non-market economy, seen as a socialist’s based economic system, is “strongly influenced by equilibrium model of neoclassical economics” (Humphrey, 2003) and was associated with early theorists, political economists, and sociologists like Carl Marx. It was characterized by little analysis of the economy and no many technical skills. However, the current market economy is an exclusive way of owning a means of production such as land, tools, machinery, energy, and materials, a concept that has also been adopted by the governments through the “tax collection, expenditure, and subsidies application” (Kenneth, 1969)
Marx offers his critique on the wealth of nations where modern economists calculate wealth in terms of the amount of money in the treasury. According to Marx, wealth should be looked at in terms of labor, that the fact that division of labor, that suggests surplus production existed, then markets also existed, presuming that the existed markets represented the non-market economy. Thus the “theory of reciprocity, redistribution, market exchange, and householding” (Friedman, 982) as captured in Karl Polanyi’s work, History, Economics, and Anthropology, “that the function of the economy is based on the social relationship by allocation of wealth conforming to the values of each community”.
The people who come together to do the work share one common goal of wealth redistribution and therefore there is no incentive of working towards acquiring individual wealth or struggle to get wealth more than the rest of the society members. The drive to work comes from the social pressure of working with family members and friends and the increased “social prestige” (Armentano, 1969). The labor is analyzed in terms of how much work the group has done that would determine the total output rather than individual output seen in market economies, which, John Locke, in his work, Treaties of Government (1689), describes as “state of nature” in the theory of labor to own property.
However, Marx rejects this “state of nature” and insists that capitalism is illegitimate because there is no way one should “privatize” another person’s surplus production (labor) as his own property, a characteristic of the current market economy of capitalism. Saying that capitalism ‘deprives’ the worker of the product of his labor, and alienates him from other people since the worker is turned into ‘appendages of the machine’ and charging that this private property is a product of their labor, high-level exploitation.
The social aspect of this form of a market economy is seen in the way many governments operate today. The pulling of resources in one central depository system is seen by many as a social effort to replace the non-market economy by distributing wealth equally among the different communities in a state. The government can use this approach to increase the social welfare of its people (Dickens, 1996). This is likely to be the future trend. Using an “agent-based system” to calculate the resource allocation problems in the political economy. This may be the future trend if this model is well developed and can easily replace the market economy due to its social inclinations (Edwards, 1972).
However, Marx would not concur with this idea since it still entails the working-class characteristic that represents capitalism, a market economy that separates the workers from other people.
Reference
Humphrey, S. (2003). History, Economics, Anthropology: Reciprocity, Redistribution, Householding and Market Exchange, New York, Sage printers.
Kenneth, J. (1969). The Organization of Economic Activity: Issues Pertinent to the Choice of Market versus Non-market Allocation, London, Cambridge University Press.
Friedman, M. (1982). The relation between economic freedom and political freedom’ in capitalism and freedom. Chicago: university of Chicago press.
Ngugi, T. (1989). Seeker of truth and justice” from Matigari. London: Heinemann international.
Armentano, D. (1969). Resource Allocation Problems Under Socialism. In Snavely, W. P. (ed.), Theory of Economic Systems. Columbus, Ohio: Merrill, pp. 127-139.
Edwards, P, (Ed) (1972). Ethics, history from the encyclopedia of philosophy volumes 3 and 4. New York: Macmillan.
Dickens, C. (1996). Selections from hard times. Graham law, ed. Peter borough: Broadview press, pp. 60-65, 91-111, and 169-182.