Karl Marx Vs Adam Smith

The two theorists that I will be comparing are Karl Marx and Adam Smith. Karl Marx was a renowned economist and revolutionary socialist. Although he was born in Prussia in 1818, Marx spent the majority of his life living in London were he moved in 1849 and remained there until his death in 1883. Many of his theories on society, economics and politics are based around classes, in particular the bourgeoisie and the proletariat. He heavily believed in the inevitable collapse of capitalism and the importance of the working class in staging a revolt to over through the bourgeoisie. Adam Smith was born in Scotland in 1723 and was a key figure in shaping classical economics and is well known for his book, The Wealth of Nations in which he presented …show more content…
Karl Marx heavily believed that capitalism was doomed to fall and that the economic system had numerous flaws. One flaw that Marx identified is the problem of ‘surplus labour’. Www.allaboutworldview.org describes this as the ‘ability of the bourgeoisie to manipulate workers allows them to devalue labour, thereby creating profit for themselves by lowering the price of labour’. Marx had strongly disagreed with this system and believed workers are being exploited. He explains, ‘accumulation of wealth at one pole is, therefore, at the same time accumulation of misery, agony of toil, slavery, ignorance, brutality, mental degradation, at the opposite pole’ (History of Socialism, Laidler 1968 p.152). Another flaw in capitalism is its chaotic nature. Capitalism is seen as chaotic and unpredictable as it is controlled through a free market and government cannot control every aspect of the economy. Due to this, Marx makes the argument that socialism is a better system as every aspect of the economy is controlled by the government and therefore little to no crises will occur. He mentions on numerous occasions that capitalism is prone to destroy itself and the working class will revolt and over through the capitalist which will be followed by a new socialist economic system. This is also mentioned by Engels (1993 p.69) as ‘the proletariat seizes political power and turns the means of production into …show more content…
One major differences between the two are that they both have extremely opposite views on how an economy should be run. Adam Smith believes in capitalism and free markets where the government has little to no control which in other words is known as, Laissez-Faire. Whereas Karl Marx believes in socialism and trusts that the economy is best run when the government has control on all aspects of an economy and were wealth is shared out equally amongst the public. Another difference between the two theorists are their opinions on how the production should be processed. Adam Smith advocates that division of labour and specialisation is the finest way to produce goods as firms can become extremely efficient and produce numerous more goods in a day as the production is divided into various parts. Karl Marx disagrees with this method as he states this will cause a state of alienation. Due to the face workers are only working on a portion of the good rather than producing the whole good itself, they are alienated from the product and do not feel a sense of accomplishment or satisfaction when working. Which will cause a reduction in labour morale.
Both of these two economist provide us with theories that are both extremely useful and important to modern day economics. For example, Karl Marx’s theories can be considered vastly useful in providing information on how capitalism