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Adam smith vs karl marx view on capitalism
Adam Smith on capitalism
Adam smith vs karl marx view on capitalism
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In An Inquiry into the Nature and Causes of the Wealth of Nations, Adam Smith discusses the principles of capitalism. This ideology depicts human nature as dependent, lazy, and constantly bartering with others. It recommends that humans live their lives through the division of labor, in which each person only needs to work on one or two simple operations. At first glance, this seems like a very easy life to live. However, this is not a life that I would choose for myself. I do not wish to be stuck doing one mindless task over and over again each day. I would be afraid to “fall into that drowsy stupidity” in which I would lose “intellectual, social, and martial virtues” (Smith 34). Though there is some education in the capitalist society proposed
Adam Smith begins his analysis of the market society with a look at the division of labor. He elaborates on the idea that the division of labor is essential for the growth of a civilization. Smith explains how for example, the production of pins can be done more efficiently with the breaking down and deconstruction of
...the birth of capitalism liberated the goals and means of work. Capitalism allowed individuals to own and manage their own business and reflected the secular mind frame derived from the Renaissance Era. The individual is the unit on which capitalism is based. Bonds between merchants was based on free competition rather that the need to trade. This liberating system of economy allows rise for the individual to direct his own business.
Adam Smith justified the ethics of capitalism by stating that it did not benefit the common man. He felt that if the government interfered, there would be proper distribution of wealth and it would result to more efficient business.
Smith and Marx agree upon the importance of capitalism as unleashing productive powers. Capitalism is born out of the division of labour... that is, it is made possible by dividing jobs up into simple tasks as a way of increasing efficiency. By increasing efficiency, then everyone can produce more than they personally need. The extra produced can go towards the accumulation of capital, (machines, more land, more tools, etc) which will allow for even more increased efficiency and production. Both thought that this increased production was great. But Marx said that capitalism was only one stage... that every country must go through capitalism, to get that increased production, but that capitalism is unstable. It requires expanding markets and will end up creating a large gap between the wealthy and the poor, with more and more people becoming poor. Because of this instability, he thought that it would eventually collapse.
In today's society, there are many forces that shape the world. Three forces that have a major impact are Capitalism, Globalization, and the Natural Environment. These forces all play major roles in either influencing or informing my lived experiences.
... with many weaknesses, and in order for this ideology to succeed in the 21st century it would have to be revised and overcome the short sightedness and adjusted to today’s economy. Smith's idea of capitalism was never derived to act as a way for people to profit at the expense of the less fortunate, and to keep the lower half of society oppressed and dominated by the higher class. If there were a slim chance Adam Smith’s ideology could work in the 21st century all classes must be able to advance at equal rates. Is that possible? Not sure. But when this idea got lost the more selfish attributes of our being was when our real efforts for survival began. The reality of it all is that having more wants than we need will continue drive some sort of division between the classes, and consuming more than we need impends our capacity to have anything in foreseeable future.
Through out history money, wealth and capital have dictated a way of life to the masses. Wealth dictated the lives that the rich lived and the lives of the poor that worked for and surrounded them. In some cultures your class could never be escaped in life, you had to wait for your next incarnation, while in other cultures the idea of wealth transcended a life and allowed for growth from one class to another. This is the reality of a capitalist society that was first discussed by Karl Marx in the 19th century.
Adam Smith’s The Wealth of Nations - The Natural Order is Driven by Man’s Self-interest
The division of labour described by Adam Smith in The Wealth of Nations is a product of individual self-interest. This is representative of Smith’s methodological individualist interpretations of human nature. Adam Smith deduces that the division of labour is beneficial to the individual, as it is in one’s own interest to work less whilst still engaging in tasks that are to their own specialities. Highly specialized work is beneficial for nations to grow economically whilst allowing individuals to further pursue their own rational self-interest. To further explain the concepts that Smith proposes I will first explain what rational self-interest in regards to human nature and how the division of labour emerges from self-interest. Secondly, I
“Socialism.” Wikipedia, The Free Encyclopedia. 30 Jan. 2012. Wikimedia Foundation, Inc. 2 Feb. 2012. .
The essential nature of capitalism is social harmony through the pursuit of self interest. Under capitalism, the individuals pursuit of his own economic self interest simultaneously benefits the economic self interest of all others. In allowing each individual to act unhampered by government regulations, capitalism causes inventions, prosperity and ideas to be created in the most efficient manner possible which ultimately raises the standard of living, increasing opportunities and makes available an ever growing supply of products for everyone.
The pivotal second chapter of Adam Smith's Wealth of Nations, "Of the Principle which gives occasion to the Division of Labour," opens with the oft-cited claim that the foundation of modern political economy is the human "propensity to truck, barter, and exchange one thing for another."1 This formulation plays both an analytical and normative role. It offers an anthropological microfoundation for Smith's understanding of how modern commercial societies function as social organizations, which, in turn, provide a venue for the expression and operation of these human proclivities. Together with the equally famous concept of the invisible hand, this sentence defines the central axis of a new science of political economy designed to come to terms with the emergence of a novel object of investigation: economic production and exchange as a distinct, separate, independent sphere of human action. Moreover, it is this domain, the source of wealth, which had become the main organizational principle of modern societies, displacing the once-ascendant positions of theology, morality, and political philosophy.
Karl Marx, in the Capital, developed his critique of capitalism by analyzing its characteristics and its development throughout history. The critique contains Marx’s most developed economic analysis and philosophical insight. Although it was written in 1850s, its values still serve an important purpose in the globalized world and maintains extremely relevant in the twenty-first century.
Adam Smith's Wealth of Nations was published in 1776, coincidently the same year as the Declaration of Independence, is considered by many economic scholars to be the early framework of capitalism. Smith’s “invisible hand” metaphor explains how the motivation of the individual, a strong workforce and a decentralized market are the driving forces for economic prosperity. According to Dr. Crowley:
The division of labor and the accumulation of capital are what Adam Smith believed to be the driving forces of economic growth in any nation. He found that when the division of labor had broken down the production of almost any commodity into a series of simple operations it was more natural for tools and machinery to be invented that replace hand labor and expedite the entire production process, thereby increasing worker productivity. This increased productivity, combined with the growing capital stock to increase national output, enables a society to enjoy higher levels of consumption, resulting in a genuine rise in the “wealth of the nation” according to Smith.