Marx vs Smith - 2023 Words

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 â€Å"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. Adam Smith, the father of economics as a science, combined economics with moral theory in regards to the way societies ought to live.†¦show more content†¦The simplest definition of the labor theory of value states that â€Å"the value of an exchangeable good or service lies in the amount of labor required to produce it; the source of profits under capitalism, then, is value added by workers not paid out in wages.†[11] This theory dictates that a particular commodity possesses value because of the labor that went into creating it. Marx, asserted that in order for a fair and equal change to occur between parties, the items of exchange must be commensurable. Marx’s labor theory of value included labor itself—what Marx called labor power. This is the worker’s capacity to produce goods and services. In order to produce, a worker must be fit to do so; this means that he or she must be clothed, sheltered, fed, rested, etc., before he or she will be abl e to properly complete the job. Marx stated that the hours it would take society to feed, clothe, shelter, (etc.) the worker so that he or she is fit to produce, should dictate the worker’s wage. For Marx, these classes were the bourgeoisie and the proletariat; the bourgeoisie are the wealthy capitalists while the proletariat is the poor working class. Marx advocated a revolution of the proletariat.. The new favorable ideology is, according to Marx, communism. Communism is a classless, stateless society in which the means of production are held in common. In this system, competition is eliminated, andShow MoreRelatedSmith vs. Marx - a Comparison Essay1247 Words   |  5 PagesSmith versus Marx Ââ€" A Comparison S. Glen Balanoff July 04, 2004 Smith versus Marx Ââ€" A Comparison Modern economic society can be described as a combination of certain points from several theories combined into one. Changing dynamics and economic needs of nations has spawned a development of various, and contrasting, economic systems throughout the world. Perhaps the two most contrasting philosophies seen in existence today are that of capitalism and communism. The two philosophers most notablyRead MoreEssay on Capitalism: Karl Marx vs Adam Smith1048 Words   |  5 PagesMarx v. Smith on Capitalism Capitalism, according to the Encyclopaedia Britannica, is â€Å"the means in which production are privately owned and production is guided and income is disputed largely through the operation of markets†. Capitalism saw the emergence after the feudal system of Western Europe can do a halt. Many economists, even today, dispute the simple beginnings of capitalism. Some theories range from religious reasons, such as the rise of Protestant Reformation in the 1500s, to the enclosureRead MoreAdam Smith And Karl Marx1674 Words   |  7 PagesI. 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Predominantly, both of these theorists’ discussed the effects of capitalis mRead MoreCritically Assess the Pluralist and Marxist Views of the State1553 Words   |  7 Pagesall, the ideas and theories of Karl Marx are most commonly interpreted as a critique of capitalism where the minority elite, or the bourgeoisie, control the working class, or the proletariat (Miliband, 1988; Schwarzmantel, 1994; Hay, 2006). However, Marxism had only developed after the death of Marx therefore the ideas which are attributed to him are bound to differ. All the same, there is one key issue from which Marxism developed that is said to be evident: Marx himself believed that he had developedRead MoreEconomic Systems: Socialism and Capitalism Essay1018 Words   |  5 PagesI have observed that when Americans discuss the relative merits of socialism vs. capitalism, the chief debates that come up are †¢ What would happen if we remove the stimulus for innovation and productivity that a free market generates? This implies having a free market including individual ownership and control, and to varying degrees a laissez-faire government. †¢ Would it be possible to have a thriving society in which we would not have 20% of the population living in poverty and without adequateRead MoreAdam Smith And Karl Marx s Views On The Deregulation Of University Fees3256 Words   |  14 PagesECON1401 Written Assignment 2: Adam Smith and Karl Marx’s Views on the Deregulation of University Fees INTRODUCTION The Abbott government’s recent proposal for deregulation of university fees in Australia has brought about much controversial debate. Under current policy, university fees are set at a fixed rate, in which a price ceiling is placed on the amount universities can charge students and with no interest on student loans. 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Capitalism is regarded as an economic system and a political strategy distinguished by certain characteristics whose development is conditioned by numerous variables. So how is Capitalism viewed in the United States of America? American Capitalism can be viewed