Adam Smith and Karl Marx

The economic theories of Adam Smith and Karl Marx have different systems, but both of them are significant to social progress. Capitalism is formed to set the economy free, and is carried out during the Industrial Revolution. Later, Marxism is formed as a result of the Industrial Revolution, trying to ensure the welfare of the working class. Although Karl Marx aims at bringing equality to society, ultimately Adam Smith is correct, because his theory of capitalism increases working efficiencies, promotes economic development, and inspires innovation.

A major difference between Adam Smith's view of economics and that of present day capitalist theory is that Adam Smith viewed value as a product of labor, and thus operated under the Labor Theory of Value, which was used by basically all economists until the Labor Theory of Value became central to Marxism.

Adam Smith, Karl Marx, and John Manor Keynes were all economists with different ideologies on how economic systems should operate. Adam Smith had a theory called laissez-faire also known as Free Market Economy. In this economic system business is conducted without any governmental interference. “This was the precursor to capitalism, in the sense that the economy was governed by the invisible hands of supply and demand.” As described in Mr. Smith’s published work: Theory of Moral Sentiments. Adams smith’s view on economic systems is the polar opposite of Karl Marx’s economic system.

In his book Born in Blood & Fire, John Chasteen defines Progress as any transformation that made Latin America similar to European and US models, resulting in human improvement. These transformations included the application of advanced technology, new political aspects, and economic growth. Neocolonialism was born from Progress, which can be explained as the influence foreign countries had on Latin America’s colonization. There was, however, different views on which way Progress should be achieved Latin America. Adam Smith and Karl Marx are examples of the main two views. Adam Smith, a Scottish Philosopher, was a critique of controlled markets and supported the idea that consumers should be able to engage in a free market in order to achieve overall self- profit. As a believer in capitalism, Smith also viewed private property and overall self- interest as positives. Implementing these ideas without the interference of the government, Smith believed, led to unlimited wealth and the most desirable economic outcome. Karl Marx, on the contrary, believed that poor people suffered for the benefit of the higher social class. Co-author of the famous document, The Communist Manifesto, Marx supported communism, the abortion of distinguished social classes, and developed into one of the widely known critics of capitalism; Marx believe that the idea of capitalism gave an advantage to the people who were already rich and gave no opportunity for the working class to rise socially or

Throughout history, economists have debated over various theories, in an effort to discover the one solution that will achieve the most efficient and beneficial economy. One school of thought titled, Classical Economics, is infamous has been called the “first modern school of economic thought.”[1] Two economist/philosophers who have been placed within this Classical category are Adam Smith and Karl Marx. Though these two men are polar opposites in the political-economic spectrum they share some similarities; and although dated, there are points of value to both Adam Smith’s and Karl Marx’s theories.

The concept of living the “best human life” and how to achieve it is central to both John Stuart Mill’s and Karl Marx’s theories on how the government should be run. What that best life entails depends on which school of thought you refer to. The two philosophers present contrasting, and in some aspects logically incompatible conceptions of the best human life. The core divergence between the two lies within their definition of freedom, the impediments to its realization, and its relationship to the individual and society as a whole. Mill’s conceptualization of freedom is rooted in idealism, and Marx’s conceptualization of freedom is rooted in materialism. For Mill, freedom is defined within the constraints of one’s mind; the liberty to think,

Marx's labor value theory, origins in Adam Smith's the wealth of nations; labor create value in the point of view of, and thought that labor create wealth and are allocated between the different classes, in the forms of wages, profit and rent (Marx 1867: 127-131; Smith ). Marx and Adam Smith are the same at this point. Their divergences were mainly in the deductive way. Herein, Smith discussed the distribution of wealth, he began to discuss quantitatively and accurately the relationship between the various elements in the production process (.Marx, on the other hand, has qualitatively discussed whether it is reasonable to allocate wealth so as to find "surplus value" (Marx 1867: The elaboration of marxist economics on economy is not focused on economy, but more is based on the discovery of surplus value, and proves the rationality of socialism economically (Marx 1867:

Adam Smith’s book The Wealth of Nations is widely considered to be the birth of capitalism, and prior to this, states primarily were mercantilist. Unlike capitalism, mercantilism did not create wealth, but instead was structured around “the view that maximising net exports is the best route to national prosperity” , meaning that the state would focus on exporting and attempt to avoid imports. Mercantilism would be replaced by capitalism in the late eighteenth century, with the publishing of Smith’s The Wealth of Nations. Smith’s book, and especially the notion of “the invisible hand” is seen as the birth of “what is known as classical economics” and capitalism and is the foundation for the free market economy. At the heart of Smith’s view was a “laissez-faire attitude by government toward the marketplace will allow the “invisible hand” to guide everyone in their economic endeavors, create the greatest good for the greatest number of people, and generate economic growth.” Karl Marx would come to criticize the capitalist system, suggesting that it benefitted the wealthy, what he called the bourgeoisie, while harmed the working class, the proletariat. Marx’s view that capitalism was inherently exploitative, and he believed that, over time, the inequality of the capitalist system would intensify and eventually would destroy itself. “Marx predicted the fall of capitalism and movement of society toward communism, in which “the people” (that is, the workers) own the means of production and thus have no need to exploit labor for profit”. Throughout much of the twentieth century, the teachings of Marx were loosely used by numerous countries, most notably the Soviet Union and China. Many of Marx’s theories have been discredited since, mainly due to the failure of communist economies and the rise of wages for workers in capitalist nations. The collapse of the Soviet Union at the end of the

In August of 1844, 26-year-old Karl Marx and 23-year-old Freidrich Engels met in Paris for an aperitif at the Café de la Regence – an old meeting place of Voltaire and Diderot. Their ensuing discourse lasted ten intense days and resulted in a lifelong friendship. This transformative relationship is evident in the publishing of The Communist Manifesto (1848) during a period of widespread European revolution. Although Marx and Engels agreed that revolution is justified to create a Communist society, their difference of opinion on how that revolution should occur is compelling. Marx’s vision of revolution was limited to challenging the bourgeoisie through political and economic means, while Engels’ vision involved calculated military action.

One individual that shaped the economy is the father of economics, Adam Smith. He is recognized for many significant discoveries in economics. Based on Smith’s lasting legacy and his impact and influence on economics, it can be argued that he was one of the most influential people in history in the fields of economics and philosophy making important contributions to our society.

Karl Marx and Max Weber both identify economic position as being a key factor in social stratification. Marx uses the Materialist Conception of History as his basic premise to show that there exist two classes which are in opposition to one another, and that they are in constant social conflict with one another due to the structure of capitalism itself. Weber, on the other hand, describes class as being an objective measure of wealth, with conflict not between classes but within them. Although Marx and Weber both conclude that societies contain substantial economic class inequalities, their conclusions differ greatly. Marx defines class systematically, as a position within the mode of production, and Weber defines it comparatively, as the amount of wealth one owns, and thus they disagree on whether this economic stratification is a source of social conflict.

Adam Smith was “the father of capitalism”. Capitalism is basically the idea of you work for what you get. Property is private, government regulations are minimal, no safety for failure and control of production was private. An example for this term modernly is that a doctor gains more money than a McDonald’s employee for the situation is the doctor worked more and gained more to fill his or her position. Karl. Marx was the one who founded the idea of communism. Property was shared, government regulations were maximum, there was safety for failure and the control of production was the government and the people. This basically states in modern terms that a doctor

Karl Marx and Friedrich Engels, the infamous villains of capitalism, were authors who wrote The Communist Manifesto. Their theory argues that class struggles or the exploitation of one class by another will give rise to a new world order in which society as a whole will take control of their own destines. This involves the battles between the proletarians and bourgeoisie, communism and democracy, and final capitalism and socialism. However, since the times of Marx and Engel communism has been slowly dying. With the rise of capitalism and democracy has come the fall of communism and socialism. Why is that? Well when most people hear the term communism and socialism they quickly assume that it’s a system based on sharing and giving up one’s

Though modernity typically arrives with great promise for a better life for all, modern theorists like Jean-Jacques Rousseau and Karl Marx argue that with modernity actually causes individuals to less happy and less free. Rousseau, for example, believed that modern society created a new kind of moral inequality that lead to a collapse in happiness while Marx believed that capitalism (a modern economic system) lead to the division of two hostile classes. Contrarily, thinkers such as Constant and Mill have a significantly more positive outlook on modernity. Constant for example, felt that with modernity comes less oppression, more civil liberties and a truly representative government that operates based on the needs of its citizens while Mill believed a balance between individual liberties and a government that protected and enforced those liberties would allow for more personal freedom and overall happiness.

Karl Marx and Max Weber both made tremendous contribution on the development of Sociology. Their studies and theories still have significant meaning for modern sociologists to explore the social world. As Weber are born after Marx about several decades, his theories are influenced by Marx to a great extend so that Weber finds much common ground with Marx. Their conceptions about religion,capitalism, social class and power are in some ways compatible. The aspects of their study are quite similar, and Weber builds upon the analysis which developed by Marx, Meanwhile, Weber is also very critical about Marx’s theory that they have different approaches when they define the social problems, such as their views towards work under capitalist society. For Marx, class conflict is central to understand work and capitalism, but Weber does not consider conflict as a central point to understanding the organization of work and the development of capitalism, he sees the importance of cultural preconditions and norms. With the development of industrial capitalism, work becomes an important aspects for sociologist to understand the society and social problems, Marx and Weber both put great efforts on study of work. Until today, in the circumstance of globalization, their theories are still effective to explain some phenomena regarding to work. This article aims to compare and contrast the theories of Marx and Weber on work, by looking at the contemporary issue of