Adam Smith vs. Karl Marx Adam Smith and Karl Marx were well-known contributors to society and to the economic thought process. Under each of their own economic policies, they wanted their people to succeed. Adam Smith had a very capitalistic approach to everything that involved the nation. He believes that through capitalism a nation can strengthen, it will create new wealth and everyone would be successful. Karl Marx and Adam Smith were born almost 100 years apart, and Karl Marx constantly criticized Capitalism.
The idea of this time was to build a capitalistic society and generate money and power through cheap and quick production and distribution. A laissez-faire system was established to allow unregulated rule of the factories and their production methods. The Industrial Revolution made Britain a world superpower of this time and has had both negative and positive influences because of that, that are still felt around the world today. With the invention of the factory came the growth of modern urban cities. When factories were placed in cities many people moved into the city for work.
Karl Marx Marx was interested in the role economic forces played in the functioning of society. Karl Marx lived most of his adult life in England, during this time he saw the growth in factories and industrial production. He was surprised by the inequalities that resulted because of this development, even though more goods were produced than ever before. Marx saw the rise of an economic system whereby, more goods and services where produced to sell to a wide range of consumers, but by so doing, this system divided society into two main classes; the bourgeoisie, who were the factory owners, and the proletariat, who provided the labour force in the factories (Giddens 2001:11). According to Marx, this economic system which he termed capitalism created an exploitative relationship between the bourgeoisie and the proletariat, since the proletariat had little or no control over the distribution of profits and the labour which they provided (Giddens 2001:12).
Marx believed Hegel’s view was too abstract and metaphysical in nature and did not address the problems of the real world. Marx reinterpreted Hegel’s view into his own philosophy of “dialectical materialism”. Instead of simply ideas creating change, he believed it was the clash of different economic classes that caused progress and change in history. Both Hegel and Marx believed the methods of reaching the “totality” are not important because it is only the outcome that is true. In other words, ‘the end justifies the means’.
Both capitalism and socialism are systems that may be used to do "good" or "bad" by those with power. It is for this motive that this paper endeavors to Compare and contrast the capitalist and the socialist development strategies and of the two an approach which can offer a reasonable solution to social and economic development. The essay will begin by defining the key terms like capitalism and socialism to give a foresight of what the main body will discuss. It will further indicate with firm and practical evidence which of the two is more plausible for social and economic development. Badie and Birnbaum (1983: 57) explain that within a capitalist society people are free to choose how to utilize their money.
The society’s superstructure or culture comprising of laws, morality, religion and politics. These are determined by society’s infrastructure, methods of production and exchange. He sees in history the conflicts that existed between different classes of people in society – the ruling class and the serfs during feudal times. The French Revolution brought an end to feudalism. But during his time, Marx witnessed the industrial Revolution bringing about conflicts between the capitalists and the proletariat, creating two classes in society – the rich and the poor.
Big, successful cities are driven by capitalists towards a destination where only money and power matter – not much else. Socialists, however, drive towards community and fairer places where money is spread out more equally between the people. Which was Priestley? A socialist. A socialist who believed his literature could change views – even lives!
As this capitalist industrial system spread, reactions in the form of socialist thought increased making it obvious that there was a dyer need for a revolution. This theory spread throughout the world into the early 20th century. After many socio-economic changes nations began to base their socialist/communist views on the ideologies of Karl Marx. Marx believed that the injustice in capitalism determined that the industrial working class
In the interpretation of Adam Smith the division of labor and of the society’s progress he sought out two laws that in today's society we know as the law of accumulation and the law of the population. The law of accumulation refers to the accumulation of profits, which are put back into production. By accumulating profits, capitalists can purchase additional machinery, which will keep the division stimulated, the specialization of labor therefore increases productivity. The law of population refers to labor as a subject to demand. As the law of accumulation increases wages for workers, the numbers of the working class will increase.
TNCs, firms that are able to coordinate and control processes and transactions within production networks, serve as the main driving force behind economic globalization we witness today. While the direction of economic globalization today seems to reflect the ideal - continuing expansion and mutual integration of market frontiers, the capitalistic and profit driven nature of TNCs have brought along its own share of problems. The costs of globalization are magnified in LDCs but the benefits brought along has helpe Economic globalization today is often synonymous with the creation of a greater primary industry in LDCs. TNCs tend to outsource labor-intensive jobs such as manufacturing and assembly to LDCs to reduce labor costs and maximize profits, tapping on comparative advantage at the same time. While the creation of jobs would greatly ease the unemployment problem and combat poverty effectively, the issue on exploitation of the workforce, particularly women should be considered.