Conflict Theory

Conflict theory, as put forth by Karl Marx, says that societies are in constant conflict over competition for limited resources. Marx also believed that the rich and powerful would try to remain that way at the expense of poorer members of society. However, every group/class within a society will work to maximize their own benefits.

As it relates to the financial crisis, banks took on excessive risks because the government turned a blind eye to their activities. They were bailed out by a government that used funds, which it said it previously did not have for social programs, thus benefiting the rich and powerful. The poor received nothing. Marx would say that the financial crisis was inevitable due to conflict theory.

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