Marxist economics
Picture a 19th-century factory: workers labor twelve hours a day in dangerous conditions for bare wages, while the owner who supplies the building and machines grows rich from what they make. To Karl Marx, watching the brutal early Industrial Revolution, this was not an accident but the very engine of capitalism. His economics set out to explain how that engine works, why he believed it was unjust and unstable, and why he predicted it would eventually be replaced. That body of thought is Marxist economics.
Marxist economics, built by Karl Marx (with Friedrich Engels) in the mid-1800s, rests on a few central claims. The labor theory of value holds that the value of goods comes from the human labor put into them. From this Marx derived surplus value: workers produce more value than they are paid in wages, and the difference — the surplus — is captured by the owners of capital (factories, land, machines) as profit. He called this exploitation, baked into the system rather than a matter of cruel individuals. Marx saw history as driven by class struggle between the owners (bourgeoisie) and the workers (proletariat), and argued capitalism is prone to recurring crises, rising inequality, and concentration, which would eventually push workers to overthrow it and replace private ownership with collective ownership.
Marxist economics matters enormously as critique and as history: it shaped political movements and governments across the 20th century, and its focus on power, class, inequality, and the instability of capitalism still influences how many people think. But mainstream economists reject its core technical claims. The labor theory of value was abandoned by economics in favor of marginal utility (value depends on usefulness and scarcity at the margin, not just labor); Marx's specific predictions — ever-falling wages, inevitable collapse, the rate of profit always falling — did not come true; and centrally planned economies built on his ideas generally performed poorly and often oppressively. Marxism endures as a powerful lens on inequality and power, even as its formal economic model is not accepted as correct.
If a worker is paid for four hours but produces enough value in those hours to cover ten, Marx said the extra six hours of value — the 'surplus' — is taken by the owner as profit. He called this exploitation built into the system, not just bad bosses.
Surplus value: workers produce more than their wages pay for.
Mainstream economics rejects the labor theory of value (replaced by marginal utility) and Marx's specific predictions did not come true. It endures as a lens on power and inequality, but its formal economic model is not accepted as correct.