Compare And Contrast Marx And Adam Smith

Different Viewpoints

Being from the same era- the industrial revolution, yet separated by almost a century in existence, Adam Smith and Karl Marx had contrasting and distinctive theories of economics. Smith, being a Professor of moral philosophy, associated moral theory with economics, which led to the development of the modern world capitalism. Karl Marx positioned his thoughts on injustice and disparity between different social classes, these thoughts became the underlying foundations of communism.

Smith and Marx both have diverse theories as to what would lead nations to a stable and efficient economy. Smith wrote his famous “Wealth of Nations” in 1776, which became one of his greatest works. The changes in the European economy and industrialization had an impact on Smith which is reflected in his writings. The complex formation of today’s economy throughout the world is highly influenced by Smiths take on capitalism. Despite the fact that Smith’s approach might have a more conclusive stance in the

Savings serve as the basis for the accumulation of capital for Smith. If there were no savings the accumulation would never be more than that of the spending and there wouldn’t be any capital stored up for growth. The extravagant and useless spending of money diverts the use of capital from productive to unproductive use and diminishes the amount of capital that could’ve been used effectively for increased amounts of total production. He believed that government involvement and their prodigality would be a threat to the nations. When all or most of the public revenue is used in supporting the unproductive people there us not much capital left for the productive population to use. Whereas the capital used on the unproductive will never be regained as they will continue to produce absolutely nothing and not contribute to any production in