In Conflict Theory, society is a state of perpetual conflict because of competition for limited resources. This theory is based on two fundamental ideas: that humans act rationally and that there are no finite resources. According to Marx, humans have conflictual desires for goods like food, clothing and shelter that drive them to produce goods and trade with other people. Competition for resources causes these goods to become more expensive over time as more people consume goods at the same time. Thus, competition leads to an increase in production and consumption until both reach their natural limits— which is when scarcity sets in and conflict arises. This theory gained popularity following World War II with Friedrich Hayek’s book "The Road to Serfdom."In contrast to this idea that humans act rationally but are subject to scarcity, conflict theorists believe there are no natural limits on production or consumption. According to Thomas Robert Malthus, any increase in population will be met with a corresponding decrease in food supply. Therefore, if there is sufficient food available for everyone who wants it, there will be no reason for anyone to produce anything additional since they can still acquire it through reproduction. However, if there is not enough food available for everyone who wants it, then some people will decide they can increase their food supply by producing goods instead of babies or children they can eat. Thus begins the cycle of perpetual human conflict over resources that follows competition over finite goods and services.Conflict theory states that society is driven toward discord until natural limits on production set in— at which point competition over resources drives prices higher and leads to more discordant behaviors until yet another natural limit on production is reached Further discord will occur as long as people believe they can gain more with less — such as increased productivity or increased sales — than anyone else can gain through increased production or sales volume. Therefore, according to conflict theory, productivity growth has benefits — such as increasing quality of life and creating jobs — but also has associated costs such as greater competition for limited resources and an ever-increasing need for regulation of business practices so as not to create monopolies or cartels that would create even greater conflicts over scarce resources than currently exists.
