Essay about Economics, And Economic Theory

Essay about Economics, And Economic Theory

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Economics, and economic theory, is solely based on the ideas and predictions of how specific events will affect a country 's economy in the near future. Not only this, but these theories also help to predict how each group, or class of people, will be affected. There have been plenty of theorists throughout time; however, two of the more influential theorists, Adam Smith and Karl Marx, have left an irrefutable impact on economic theory as a whole. Though both theorists were equally as influential and revered economists, Smith and Marx have differentiating views, especially on the capitalist market economies effects on the working poor. From the wage labor bargain to the evolution of work as a result of the division of labor, both economists have varying, yet impactful, analyses of their theories.
Beginning with Adam Smith, his theories consistently focus on the value of labor and the evolution of work as a whole. Throughout his novel, The Wealth of Nations, Smith observes that to increase the quantity, and oftentimes the quality, of work, the division of labor is absolutely necessary. However, in order for people to be capable of specific labor needs, certain circumstances must take place. First, each workman must increase their proficiency in their particular field. Smith states that the improvement of work proficiency will increase “the quantity of the work [the workman] can perform; and the division of labour, by reducing every man’s business to some one simple operation, and by making this operation the sole employment of his life, necessarily increases very much the dexterity of the workman” (Chapter 1). In other words, by becoming an expert in whatever one does, that worker is worth more to the company hiring them. This evo...


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...dexterity being a key to the division of labor makes a lot of sense, especially in relation to the working poor. In today’s capitalist society, it is fairly hard to acquire, and keep, a job. However, those who do are the ones with a specific and proficient set of skills most others do not have. For example, plumbers have a set of skills that an average person does not - this is why their labor is valuable to society and is work a great deal of money. In regards to the working poor, advanced machinery, as well as proficiency, allows people under the poverty line with little to no education to thrive in these new work settings. Whereas under Marx’s theory, the working poor almost have no change in the workforce and their capital could possibly stay the same. Overall, I believe that Smith’s economic theory is better suited for the success of the working poor than Marx’s.

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Essay about Economics, And Economic Theory

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