Smith and Marx in Economics Essay Example | Topics and Well Written Essays - 1250 words - 1

Smith and Marx in Economics - Essay ExampleIn his economic theory he focused more often than not on issues relating to labour and power, while Smith focused on capital and freedom. A significant number of people think that Adam Smith invented economic science when he published The Wealth of Nations in 1776. In it, Smith wrote close how wealth is generated from both labour and land, and how this generation of wealth can lead to high living standards and productivity. Accumulated wealth is capital that can be reinvested and yielf further dividends. The accumulation of wealth was a good thing it was especially encouraged in systems that permitted free trade. Free trade permitted goods and services to be exchanged without tariffs. The main advantage of this was that it allowed people who had different items at their disposal to obtain things they needed. He wrote about the markets invisible hand. This is an illustration that suggests that the market knows best, as it is the accumulat ion of peoples desires. It is most famously summed up by Smith as follows It is not from the liberality of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages (26-7). ... This produce bears a greater or smaller proportion to the number of those who are to consume it .But this proportion must in every nation be regulated by two different circumstances first, by the skill, dexterity, and judgement with which its labor is generally applied and, secondly, by the proportion between the number of those who are employed in useful labour, and that of those who are not so employed (Smith, 10). His insight into 18th century economics was remarkable at the time. But hindsight makes Smiths contribution especially weighty as it resulted in political freedom and a remarkable generation of wealth. Th is was in direct contrast to the work of Marx, which led to misery and death. Smiths work was picked up great economists such as Frederick Hayek and Milton Freedman to argue for freer markets and more private ownership. Today the Wealth of Nations is considered a foundational text and Smith, who was cited frequently in his own day, is considered maven of the greatest economists (Campbell, et al, 7). Throughout the 19th century a number of economists took up Smiths work and added to it but the greatest economist of that century was surely the German Karl Marx. His shape on orbit history was tremendous. His work was very different than Smiths. He focused on the unfairness inherent in the capitalistic system and mat that only labour was valuable. He felt that workers were being oppressed by employers and that they should rise up and form a new ruling class. Revolutionaries around the world took up his ideas in the 20th century to disastrous effect.