MBA 5105 · 2025/2027
Topic 04 · The structural critique
— iv —

Capitalism & Marxism
Critical perspectives.

What capitalism actually is, why Marx is uncomfortably hard to dismiss, and where the Sri Lankan crisis sits inside the analysis.

Reading 01 · Fulcher (2004) Reading 02 · Ingham (2008) Reading 03 · Vidal et al. (2015) Reading 04 · Glassman (2022)
§ 01

What's being argued in this topic.

Marxism is the structural critique of capitalism. It is not nostalgia for the Soviet Union, not a political position you have to vote for, and not necessarily a call for revolution. It is a lens — a way of reading organisations and economies that reveals what mainstream management thinking tends to hide: who owns, who works, who decides, who benefits, who absorbs the loss.

Vidal et al. (2015) argue that Marxist analysis is exactly what contemporary organisation studies needs to address the present moment — inequality, precarity, climate, the visible crises of capital. The Sri Lankan economic crisis is one such moment.

Three things to remember from this topic
  1. Capital is money invested to make more money. Capitalism is the system in which the whole economy depends on this investment — not just trade, but production, services, everything.
  2. Profit = surplus value. The value workers produce is more than what they are paid. The difference is what gets called "profit," "margin," or "return on investment."
  3. Managers are a contradictory class. They are wage-labourers (sell their time) but perform capital's functions (organise the extraction). The exam loves this question.
§ 02

What capitalism actually is.

Fulcher (2004): capitalism is the system in which capital — money invested in order to make more money — becomes the organising principle of the whole economy. Trade existed for millennia before capitalism; merchants existed for millennia before capitalism. What distinguishes capitalism proper is that production itself is financed by capital investment, and the whole economy comes to depend on the continuous return on that investment.

"
A characteristic feature of capitalist societies is the emergence of institutions that enable the conversion of assets of all kinds into capital.
— Fulcher, 2004

This is why your house becomes a "real-estate investment," your education becomes "human capital," your social connections become "social capital." Conversion of assets into capital is the system's hallmark.

§ 03

Three stages of capitalism.

1

Merchant capitalism

Capital invested in goods bought cheap and sold dear. Trade across distances. The Dutch East India Company, the spice trade, the early Atlantic economies. Capital existed; capitalism-as-system did not yet.

2

Industrial capitalism

Capital invested in production. Wage labour at scale. Factories. Mass-production. The Industrial Revolution. A clear line of division emerges between owners of capital and those who sell labour for wages. Both the production and the consumption of goods are now mediated by wage labour.

3

Financial capitalism

Capital invested in capital. Derivatives, futures, options, structured products. Speculation as a profit centre. Not necessarily productive, but central to the operation of a capitalist economy. The 2008 crisis sat here.

Sri Lanka contains all three stages running at once: merchant operations (gem traders), industrial production (apparel, ceramics), and financial speculation (treasury bond markets, dollar-denominated debt).

§ 04

Adam Smith's opening move.

Smith's Wealth of Nations (1776) was the first comprehensive examination of market capitalism — and it predates industrial capitalism. Smith's central insight was the link between market expansion and the division of labour: extensive specialisation makes self-sufficiency impossible, which forces market exchange, which permits further specialisation, which produces greater efficiency and growth.

This is the optimistic origin story of capitalism. It is the one MBA programmes lean on. Marx's story begins where Smith's ends — by asking who benefits from the efficiency, and at what cost to whom.

§ 05

Marx's method.

Dialectical / historical materialism

Marx's way of understanding the world. Presented as a scientific method: discover the laws of historical development. Where Hegel sought the engine of history in ideas, Marx sought it in material conditions — who has what, who needs what, who controls production.

History, in Marx's reading, is the continual confrontation of dialectical conflicts in progress. Big social changes — feudalism to capitalism, capitalism to whatever comes next — are explained by conflicts between groups over material production.

§ 06

Base & superstructure.

Marx's model of society has two layers stacked. The economic base — how production is organised — sits underneath. Everything else — culture, law, religion, education, ideology, the state — sits on top, shaped by the base.

Marxist model of society

Superstructure

Ideology, consciousness, politics, state, legal systems, religion, education, ethnic and gender ideologies

↑ shaped by / reproduces / occasionally challenges ↑

Economic base (mode of production)

Relations of production · Relations in production · Forces of production (land, labour, capital)

Orthodox Marxists argue the base determines the superstructure. Neo-Marxists are softer — they say the base shapes but does not fully determine; ideology, religion, gender, ethnicity have their own logics that can push back on the base. Most contemporary Marxist analysis sits with the Neo-Marxists.

§ 07

The mode of production.

Inside the economic base sit two sets of relations around the labour process:

Relations in production

How surplus value is created. The day-to-day work — who does what task, who supervises whom, how the production line runs. This is where Taylorism, agile methodology, and gig-economy algorithms all operate.

Relations of production

How surplus value is appropriated. Who owns the factory, who gets the dividend, who decides reinvestment, who decides layoffs. This is the deeper structural layer.

Most management training focuses entirely on the first (relations in production — how to make the labour process run smoothly) while leaving the second (relations of production — who gets what) completely off the table. Marxism puts it back on.

§ 08

Class conflict & the labour process.

Marxist ontology of society is class struggle. The fundamental social antagonism that shapes everything else is the division of society into labour (those who must sell their labour-time to live) and capital (those who own the means of production).

"
Labour processes are the intervening social spaces in which the abstract antagonism between capital and labour is brought to the behavioural surface in terms of coercion, resistance and consent.
— Marxist analysis of work

If you accept that frame, work organisations are not neutral coordinating devices. They are productive social spaces in which labour is directly entangled with capital — every meeting, every KPI, every promotion-decision is a moment in the struggle for subordination of labour-power to capital.

Hence why there are so many laws protecting property, copyright, trespass, intellectual property, etc. The whole legal apparatus is constructed to keep the system from collapsing.

§ 09

The four alienations.

Marx's most famous analytical contribution: under capitalism, workers become alienated — estranged from what makes them human — along four dimensions.

Alienation from

the product

The worker does not own what they make. The garment leaves the factory; the worker never wears it. The thing they create stands against them as someone else's property.

Sri Lankan example The Katunayake EPZ machinist sewing a Marks & Spencer dress she will never afford.
Alienation from

the productive process

Work is not chosen, controlled or shaped by the worker. Pace, method, sequence are dictated by management or by algorithm. There is no creative or designing role.

Sri Lankan example The PickMe driver whose every turn, wait, route, and break is determined by the platform's optimisation engine.
Alienation from

others

Co-workers are competitors. The performance management system, the forced curve, the bonus pool turn fellow humans into rivals. Solidarity is structurally suppressed.

Sri Lankan example The Big-4 audit team where every junior is ranked against every other junior at season-end.
Alienation from

species-being

Estrangement from human-ness itself. The worker becomes a means to someone else's end; the capacity for creative, intentional, meaningful work — what Marx thought made us human — is reduced to wage-earning.

Sri Lankan example The bank teller who spends thirty years processing the same transactions and feels no continuity between her work and her sense of self.

Proletarianisation & deskilling

Under classical Marxism, capitalism continuously proletarianises — converts more and more people into formal subordination as wage labour. Self-employed craftspeople, smallholders, traditional vendors are mechanised out, absorbed into supermarkets, factory chains, platform companies. This is happening visibly in Sri Lanka right now — the wholesale collapse of small grocers into supermarket consolidation; small tea-leaf vendors into branded retail.

§ 10

The paradox of the managerial class.

This is the exam question that appears almost every year. Are managers part of the working class? Marxist answer: yes, and no, and that is the point.

The contradictory class location

Managers are labour and the local face of capital — simultaneously.

As labour

  • Sell their labour-time for a wage
  • Depend on continued employment
  • Can be made redundant in a restructuring
  • Produce more value than they are paid
  • Work long, often unpaid, hours

As capital's local face

  • Perform what was once the owner's role: hiring, firing, supervision
  • Manage labour and market without owning them
  • Discipline workers on capital's behalf
  • Carry the ideological work of meritocracy
  • Have relative autonomy and ability to realise own desires
The PMC is to align or attempt to align with capitalists; their relationship with the working class is essentially antagonistic.
— On the Professional Managerial Class

Why this matters for you, the MBA student

If you are now (or will soon be) a manager, this lens makes visible what your training is designed to obscure: you are not a neutral coordinator. You occupy a specific structural position. When you set a deadline, approve a leave, sign off on a layoff, you are acting as capital. When you yourself receive a "performance improvement plan," you are labour. Marxism does not require you to do anything about this; it requires you to see it.

§ 11

Braverman: deskilling & Taylorism.

Harry Braverman positioned the issues of class and history at the centre of the analysis of work. His key argument was that the real subordination of labour under capitalism happened not through machinery alone — as Marx had thought — but through Taylorism: Scientific Management, breaking work into measurable, controlled tasks, separating the planning of work from its doing.

"
Henceforth it is to depend not at all upon the abilities of workers, but entirely upon the practices of management.
— Braverman on Taylorism

Two consequences:

§ 12

Burawoy: regimes of control.

Where Braverman focused on conflict, Michael Burawoy asked the opposite question: why do workers cooperate? Why does the system reproduce itself peacefully most of the time? His answer is the concept of regimes of control: how factory-level discipline is organised in different historical and geographical settings.

Market despotism
Patriarchal, paternalistic, market-disciplined control. Pre-twentieth-century UK and US. Workers obey because they must.
Hegemonic regime
Mid-twentieth-century welfare-state capitalism. Workers consent because the system delivers a degree of security and dignity — pensions, unions, job security, public goods.
Hegemonic despotism
Late-twentieth-century globalisation. Workers consent through threat — accept concessions or the factory closes and relocates. Global competition + weakened state = a "consenting" form of coercion.
Colonial & post-colonial regimes
For Sri Lanka and other LDCs (Hopper et al., 2009): colonial despotism → politicised state capitalism → politicised market capitalism (crony capitalism). The transition is not from despotism to hegemony — it is from one form of politicised control to another.

Sri Lanka is described in the literature as having moved through colonial despotism (plantations under British rule), to politicised state capitalism (1956–77), to a particular form of politicised market capitalism — what Hopper et al. call crony capitalism. Recognising this is half the answer to any question about the Sri Lankan crisis.

§ 13

The Sri Lankan crisis through a Marxist lens.

The 2022 economic crisis — and its 2026 aftermath — is unreadable from inside mainstream management thinking. Functionalist analysis can describe the symptoms (forex shortage, inflation, energy crisis) but cannot name the structural causes. A Marxist reading sees:

Contradictions of capitalism as per Marx

Marx argued capitalism contains inherent contradictions that lead to its eventual downfall: wealth is socially produced but privately appropriated; crisis and depression are inevitable; over-production (especially of financial products) generates the next crisis; after each downturn, smaller firms die, larger firms consolidate, and the working class expands.

Glassman (2022) updates this for the present: Marxism today demands attention to "all the perverse permutations of class power and privilege" — imperialism, the racialisation and gendering of class, the rationalisation of class power across the US, UK, Canada, China, India, Russia, and the Global South.

§ 14

What past papers keep asking.

Marxism appears every year. The recurring question is some variant of "is Marxism still applicable to contemporary organisations?" or "are managers a class?" — and the answer the marker is looking for is almost always yes, and here is why.

Recurring exam frames
  1. "Marxian analysis can be used in examining power, economic relations, and social structures within organisations." (2024)
  2. "Class conflict and alienation seem more applicable to society than to organisations." (2023) — disagree
  3. "With participatory management and empowerment, employees are no longer exploited." (2022) — disagree
  4. "Marxism gives contemporary managers an important insight." (2021 Weekend)
  5. "Managers are excluded from the Marxist class structure due to compensation and decision-making freedom." (2021 Weekday) — disagree
  6. "Contemporary business organisations sufficiently address Marxist concerns." (2019) — disagree
  7. "Marxist analysis of labour exploitation does not apply to managers." (2019) — disagree
  8. "Managers are a category of labour." (2018) — agree, with the PMC nuance
Open · Past Papers
Model answers for every Marxism question (2018 – 2024)

The reliable 5-step answer

  1. Define capitalism (Fulcher / Marx) — capital, wage labour, surplus value.
  2. Name the lens — class analysis, alienation, the PMC paradox, regimes of control.
  3. Apply to organisations — show what the lens reveals that functionalist management hides.
  4. Sri Lankan example — tea estates, garments, gig economy, SriLankan Airlines, crisis context.
  5. Conclude — Marxism is uncomfortable but clarifying. The lens is alive precisely because the structure is intact.
§ 15

30-second cheat sheet.

If you remember only this

Marxism, in one breath.

  • Capital = money invested to make more money. Capitalism = the system in which the whole economy depends on capital investment in production.
  • Three stages: Merchant → Industrial → Financial. Sri Lanka contains all three simultaneously.
  • Surplus value = the gap between what labour produces and what it is paid. This gap is "profit."
  • Base & superstructure: economic relations shape (but don't fully determine) culture, law, ideology.
  • Four alienations: from the product, the process, others, and species-being.
  • The PMC paradox: managers are labour AND the local face of capital. Contradictory class location.
  • Braverman: real subordination of labour happened through Taylorism (deskilling), not just machinery.
  • Burawoy: regimes of control — despotic → hegemonic → hegemonic despotism → crony capitalism in LDCs.
  • The Sri Lankan crisis is structurally legible as a Marxist case study.