Importance Of Class Structure

Class structure, and indeed the fundamental existence of class, is a widely debated topic in Australia and the Western world, as highlighted through classical political economics and Marxist political economic philosophy. As Erik Olin Wright argues, “class structure is inherent in social conflict, and therefore must be conceptualised in order for appropriate social change to take place” (Wright, 1980). As such, the economy has maintained an important role in shaping class structures throughout the industrialisation of the world and the formation of capitalism, as economic fluctuation affects the opportunities presented to individuals and the power and agency each class is able to possess. Furthermore, the class structure impacts economic outcomes, as hereditary social and economic patterns, inherent within class structures, further impact economic and social opportunities.

Class structure and the belief in the inherent strength of economic processes over political and social methods were of vital importance to classical political economists (Wolff and Zacharias, p2). The classical school, epitomised by the works of Adam Smith and David Ricardo, focused on the distribution of income and the differences between social classes. Classical theory outlined three distinct classes, namely the capitalists, whose income is commodity profit from the production process, the workers who gain wages as income from their labour and landowners, whose rent collection is considered income (Milios, 2000, p2). Fundamentally, the classical school of political economics argued the net profit of any product is distributed between the three classes (Milios, 2000, p3).

In classicalist David Ricardo’s theory of labour value, which focused particularly on...

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...omes, as an individual’s social standing, which is often hereditary, can influence prospects of education and future opportunities for work. Therefore, it is evident that the issue of class structure and the economy remains a struggle between Karl Marx’s bourgeoisie and proletariat. However, it is arguable that the classical political economic philosophy has legitimacy in contemporary economics, as this argument suggests that the agency and power allocated to the capitalist and worker classes are susceptible to economic changes. The prevalence of class conflict and struggle is notable, however this antagonism may not be as entrenched as Marx claimed. Regardless, the “power of class analysis and the relationships between class structure and forms of economic and social inequality, were… key concerns of the classical economists and Marx” (Wolff and Zacharias, 2013).