Karl Marx and Adam Smith
Adam Smith and Karl Marx
Adam Smith and Karl Marx have very different theoretical contributions. Adam Smith proposed that the free market, where producers are free to produce as much as they want and charge customers the prices they want, would result in the most efficient economic outcome for consumers and producers alike due to the. The rationale for his proposal was that each individual would try to maximize his own benefit. In doing so, consumers would only pay as much as or less than they would value the benefit that a good could provide, and producers would only sell for as much as or higher than they would have spent on producing a good. In his optimistic economy, there would be no surplus or demand; markets would always be in equilibrium, and the benefits to consumers and producers alike would be maximized. There would be a limited role for the government in such an economic system.
In contrast, Karl Marxl reasoned that workers would be broken by any capitalist, or factory owners, because he believed that a capitalist system provides an advantage for the rich and a disadvantage for the poor. The rich would get richer and the poor would get poorer. Furthermore, the “capitalist” is always in a better position to negotiate a low wage for his workers, he argued. One of his notable and more arguable theories claims that the value of a good or service is directly connected to the amount of labor required for its production. Interestingly, Karl Marx also had his own drastic, political ideas that were far away from those of Adam Smith’s.
Marx posited that the two classes in a society – the bourgeoisie and the proletariat – will remain stuck in their respective classes because of the very nature of capitalism. The wealthy capital-owning bourgeoisie not only owns the factories but dominate the media, universities, government, bureaucracy, and, therefore their grip on an elevated social status is unchangeable. In contrast, the poor, working class, or the
Adam Smith and Karl Marx have very different theoretical contributions. Adam Smith proposed that the free market, where producers are free to produce as much as they want and charge customers the prices they want, would result in the most efficient economic outcome for consumers and producers alike due to the. The rationale for his proposal was that each individual would try to maximize his own benefit. In doing so, consumers would only pay as much as or less than they would value the benefit that a good could provide, and producers would only sell for as much as or higher than they would have spent on producing a good. In his optimistic economy, there would be no surplus or demand; markets would always be in equilibrium, and the benefits to consumers and producers alike would be maximized. There would be a limited role for the government in such an economic system.
In contrast, Karl Marxl reasoned that workers would be broken by any capitalist, or factory owners, because he believed that a capitalist system provides an advantage for the rich and a disadvantage for the poor. The rich would get richer and the poor would get poorer. Furthermore, the “capitalist” is always in a better position to negotiate a low wage for his workers, he argued. One of his notable and more arguable theories claims that the value of a good or service is directly connected to the amount of labor required for its production. Interestingly, Karl Marx also had his own drastic, political ideas that were far away from those of Adam Smith’s.
Marx posited that the two classes in a society – the bourgeoisie and the proletariat – will remain stuck in their respective classes because of the very nature of capitalism. The wealthy capital-owning bourgeoisie not only owns the factories but dominate the media, universities, government, bureaucracy, and, therefore their grip on an elevated social status is unchangeable. In contrast, the poor, working class, or the