karl marx vs adam smith essay

Adam Smith vs Karl Marx: Difference and Comparison

We study many economists, and among all past economists, Karl Marx and Adam Smith are the most influential and prominent economists. Their theoretical contributions are well-known in their history.

They both wrote about many things. Here we study all relevant information about two legendary personalities.

Key Takeaways Adam Smith advocated for free-market capitalism, while Karl Marx criticized capitalism and proposed socialism and communism. Smith’s “invisible hand” theory argued that self-interest benefits society, while Marx believed that class struggle drives social progress. Marx’s ideas formed the basis of Marxist political and economic theories, while Smith laid the groundwork for classical economics.

Adam Smith vs Karl Marx

Adam Smith believed that the state should have a limited role in the economy and that the free market would regulate itself without state intervention. Karl Marx believed that the state should play an active role in the economy and that the government should control the means of production.

“Adam Smith is famous for many things which he wrote. The most well-known book by Adam Smith,, whose name was celebrated worldwide, is”The Wealth of Nations” This book is considered an important contribution to the economy. “Adam Smith is famous for many things which he wrote. The most well-known book by Adam Smith,, whose name was celebrated worldwide, is “The Wealth of Nations” This book is considered an essential contribution to the economy.

“He also advocates a”Free market economy”. Karl Marx saw the conditions and situation of that time and created his ideas and rules. “He also advocates a “Free market economy”. Karl Marx saw the conditions and situation of that time and created his ideas and rules.

He saw exploitation as individuals not receiving benefits. Marx is particular about his belief that capitalism leads to greed and inequality.

The finest paradigm for political and economic ownership was communism.

Comparison Table

Who was adam smith.

“Adam Smith is a famous theorist in the world. He is known as the” Father of Capitalism” and” Father of Economy”. “Adam Smith is a famous theorist in the world. He is known as the “Father of Capitalism” and “Father of Economy”.

He was born in the year 1723 on 16 June (undocumented).in Scotland. He was a well-known philosopher, pioneer, and Scottish economist of political economy.

“An Inquiry into the Nature and Causes of the Wealth of Nations” and” The Theory of Moral Sentiments” are his great writings. Later,” Wealth of Nation” was regarded as the first modern economics text. “An Inquiry into the Nature and Causes of the Wealth of Nations” and “The Theory of Moral Sentiments” are his great writings. Later, “Wealth of Nation” was regarded as the first modern economics text.

He introduced the principle of absolute benefit in that work. Classical Economics, Free Market, Economic Liberalism, Division of Labor, Absolute Advantage , and The Invisible Hand are some of Adam Smith’s most famous theories.

Adam Smith studies social philosophy at the University of Glasgow and Oxford College. He was an outspoken opponent of mercantilism and a proponent of laissez-faire economic principles.

He also proposed the idea of the invisible hand,, which means the free market’s tendency. He gave the concept of GDP(gross domestic product).

His views on labour jobs are that jobs tend to pay higher wages to attract labour. The two main ideas of Smith, “The Invisible Hand” and “Division of Labour” also run today’s economic theories.

Who was Karl Marx?

Karl Marx was a well-known writer of economic welfare and German philosophy. Karl Heinrich Marx was his full name.

He was a socialist revolutionary, an economist, a critic of political economy, a well-known historian, a political theorist, a sociologist, and a known journalist. He was born in Germany on May 5, 1818.

At the universities of Berlin and Bonn, he studied law and philosophy. Many foundations of the period, as well as the twentieth century, were influenced by his work.

“Perhaps there are a number of issues that a fresh generation does not examine. He wrote””The Communist Manifesto,” which is considered the most renowned booklet in economic history. “Perhaps there are several issues that a new generation does not examine. He wrote “The Communist Manifesto,” considered the most renowned booklet in economic history.

“He also wrote the first, second, and third volumes of the renowned book””Das Kapital.” He was well-known for these two well-known works. “He also wrote the first, second, and third volumes of the famous book “Das Kapital.” He was well-known for these two famous works.

Marx’s writings and others constitute the basis of Marxism , a school of thinking and philosophy. He was the eldest surviving kid out of a family of nine children.

His father was also a well-known lawyer, and his father made history by producing several famous books that influenced Karl Marx.

Reading Adam Smith and David Ricardo’s books also inspired him. However, he pioneered his field of economics.

Main Differences Between Adam Smith and Karl Marx

Adam Smith was an economist from Scotland, and was born in 1723 whereas Karl Marx was an economist born in Germany in 1818.
Smith was considered the father of current economics whereas Karl Marx was the father of Communism.
According to Smith, workers are constantly looking for the greatest job and salaries. In contrast, Marx claims that a labour wage war could easily break down our society which could lead to the economy’s demise.
Smith believed in the freedom of everyone by using any capitalistic approach whereas Karl believed in individual freedom.
Smith has a Western mindset in his thought whereas Marx believed that socialism have the power to replace capitalism.

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Last Updated : 13 July, 2023

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11 thoughts on “adam smith vs karl marx: difference and comparison”.

A remarkable piece that delves into the intricate path of economic history. Well-written and engaging.

The article certainly sets up to provide a thorough understanding of the contributions of Smith and Marx.

A well-structured and educational article. The dualism between these two great economists is always fascinating to explore.

It truly is. The article does a very good job at presenting the key takeaways.

Agreed, the article is an excellent introduction to the economic theories of Marx and Smith.

It seems to provide an objective perspective on both economists. Quite informative.

It’s interesting, but the article could have explained further in detail the impact of their theories in modern societies

That’s correct. A review of capitalism and socialism’s current state would provide clarity.

I agree, a more in-depth examination of their theories in today’s context would be enriching.

The comparison table was particularly helpful to understand the key differences in their theories. Well done.

I found it to be quite enlightening too. The article offers a comprehensive overview of their ideologies.

25 Adam Smith and Marx

Spencer J. Pack is Professor of Economics at Connecticut College, New London, Connecticut, USA. He is the author of Reconstructing Marxian Economics: Marx Based Upon a Sraffian Commodity Theory of Value (Praeger 1985); Capitalism as a Moral System: Adam Smith's Critique of the Free Market Economy (Elgar 1991); Aristotle, Adam Smith and Karl Marx: On Some Fundamental Issues in 21st Century Political Economy (Elgar 2010); and various articles in the History of Economic Thought.

Published: 01 July 2013
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This chapter outlines Marx’s general attitude towards Smith. It argues that Marx was a close reader of The Wealth of Nations and that he generally admired Smith’s work. The chapter outlines how Marx criticizes various aspects of Smith’s thought and then develops them as a part of his own theory. Topics covered include value theory and the development of money and capital. The chapter then moves on to discuss their views of the development of character and argues that their positions on both the state and historical change are also surprisingly similar. Their main difference is that Smith largely looks backward, sees that things are better than they were, and offers various reforms to improve society. Marx looks largely to the future, thinks that the future could be so much better than the present, and argues for a communist revolution.

Adam Smith was a source and stimulus for many of Marx's own ideas. From a Marxist point of view, Smith may be seen to be the sand which creates a pearl. 1 Of course, from an anti-Marxist point of view, Smith's influence on Marx and subsequent economic theory may be viewed to be quite pernicious (see e.g. Rothbard 1995 : 456). 2

Part I of this chapter outlines Marx's general attitude towards Smith. It argues that Marx was a close reader of The Wealth of Nations (WN), especially Books I and II, that he generally admired Smith's work, and even had a keen appreciation of Smith's character. However, for Marx, there were two intertwined aspects to WN. One was that he was basically correct, scientific, and ultimately led to what Marx perceived to be his own scientific analysis of capitalist society; the other was that he was superficial and led to vulgar, apologetic economics. Part II outlines Marx's critique of Smith's value theory, and argues that Marx took what he perceived to be one of Smith's approaches, the embodied labour theory of value, and developed it into his own theory. Part III argues that Marx largely follows Smith on the development of money and capital, but then picks up Smith's occasional references to rent and profits as a deduction from the produce of labour, and uses it to develop his own theory of capitalist exploitation of workers. Part IV stresses the similarity in Smith and Marx on their views of the development of character, both having what may be termed a materialist conception of society and history. Part V stresses that Smith and Marx's position on both the state and historical change are also surprisingly similar. Their main difference is in what may be termed the opportunity cost of the status quo. Smith largely looks backward, sees that things are better than they were, and offers various reforms to improve society. Marx looks largely to the future, thinks that the future could be so much better than the present, and argues for a communist revolution. On this issue, a major difference indeed! Part VI offers a brief conclusion.

Marx's general attitude towards Smith

Marx was a close student of Smith and generally admired his work. Thus, in Marx's estimation,

Political economy had achieved a certain comprehensiveness with Adam Smith; to a certain extent he had covered the whole of its territory … Smith himself moves with great naïveté in a perpetual contradiction. On the one hand he traces the intrinsic connection existing between economic categories or the obscure structure of the bourgeois economic system. On the other, he simultaneously sets forth the connection as it appears in the phenomena of competition and thus as it presents itself to the unscientific observer … One of these conceptions fathoms the inner connection, the physiology, so to speak, of the bourgeois system, whereas the other takes the external phenomena of life, as they seem and appear and merely describes, catalogues, recounts and arranges them under formal definitions. With Smith both these methods of approach not only merrily run alongside one another, but also intermingle and constantly contradict one another. With him this is justifiable … since his task was indeed a twofold one. On the one hand he attempted to penetrate the inner physiology of bourgeois society but on the other, he partly tried to describe its externally apparent forms of life for the first time … The one task interests him as much as the other and since both proceed independently of one another, this results in completely contradictory ways of presentation: the one expresses the intrinsic connections more or less correctly, the other … expresses the apparent connections without any internal relation. (Marx 1968 : 165, emphasis in original)

So it would seem that, for Marx, the ‘great charm’ of WN lay in doing two things at once: ‘The naive way in which Adam Smith on the one hand expresses the thoughts of the agent of capitalist production and presents things boldly and comprehensively … as, indeed, they appear on the surface, while on the other hand, he sporadically reveals their more profound relationships.’ Yet, Marx does not allow the charm of Smith's analysis to distract him from picking apart what he sees as various confusions in Smith's work. According to Marx, Smith's naïveté leads him to a contradiction: ‘first he grasps the problem in its inner relationships , and then in the reverse form, as it appears in competition . These two concepts of his run counter to one another in his work, naïvely, without his being aware of the contradiction’ (Marx 1968 : 106, emphasis in original).

So Smith's work is enjoyable, yet also theoretically muddled, confused, full of contradictions, or various technical puzzles.

For Marx, when Smith sees/grasps the inner relationships, he is indeed getting to the essence of the situation, he is being scientific, and is foreshadowing Marx's own work. Following Smith's technical analysis, Marx typically writes ‘If Adam Smith had continued his analysis to this point but little would have been lacking for the solution of the whole problem. He almost hit the nail on the head …’ (Marx 1967a : 369). That is the esoteric, the admirable side of Smith, prefiguring what Marx views as his own correct scientific analysis in Capital . Marx shares the Aristotelian idea that science can and does get to the essence of the thing under consideration. Getting to the essence of things is the proper goal of science, and when done correctly, it succeeds. Marx also exhibits the Whig idea of there being progress in science. In this case the science is political economy, and the end of political economy is Marx's own theory. In Marx's view, his own work then becomes not only a critique of political economy, but in a sense its culmination given his self-perceived ability to successfully analyse the laws of motion of the capitalist mode of production. When Smith deals with relationships as they merely appear, in competition with Marx's deeper analysis, Smith is judged superficial, unscientific and his work leads to apologetic, vulgar economics. A typical example of this sort of judgment can be found in Capital where Marx asserts that ‘here Adam Smith's ridiculous blunder reaches the climax … thereby throwing the doors wide open to vulgar economy’ (Marx 1967 a: 372). 3

The following are some of the examples Marx uses to demonstrate Smith's superficiality and unscientific attitude. Smith attempts to picture himself as a moderate but this is contradicted by his assessment of the Physiocrats (Marx 1963 : 344), or again, Smith was in general not as generous as he could have been in acknowledging his sources. ‘The Scottish proverb that if one has gained a little it is often easy to gain much, but the difficulty is to gain a little, has been applied by Adam Smith to intellectual wealth as well, and with meticulous care he accordingly keeps the sources secret to which he is indebted for the little, which he turns indeed into much’ (Marx 1970: 167–8). Beyond this is Marx's most perceptive general criticism of Smith: ‘More than once he [Smith] prefers to take the sharp edge off a problem when the use of precise definitions might have forced him to settle accounts with his predecessors’ (Marx 1970: 168). In this Marx is correct: whenever Smith really gets stuck on a technical issue, he glosses over the problem and moves on. In Smith's defence, though, he was able to finish his masterpiece, WN; Marx was not able to finish Capital.

Marx, of course, sees and deeply appreciates the radical side to Smith, calling Smith, ‘the interpreter of the frankly brutal bourgeois upstart’ (Marx 1963 : 288, emphasis in original). Marx admires ‘the rough cynical character of classical economy [which] stands as a critique of existing conditions’ (Marx 1963 : 299). He writes that Adam Smith ‘gives vent to his hatred of unproductive government’; and, after quoting Smith, Marx writes that ‘This is the language of the still revolutionary bourgeoisie, which has not yet subjected to itself the whole of society, the State, etc.’ (Marx 1963 : 300).

Of Smith in particular, and what he calls classical political economy in general, Marx writes: ‘Classical political economy seeks to reduce the various fixed and mutually alien forms of wealth to their inner unity by means of analysis and to strip away the form in which they exist independently alongside one another. It seeks to grasp the inner connection in contrast to the multiplicity of outward forms … it does not conceive the basic form of capital , i.e. production designed to appropriate other people's labour, as a historical form but as a natural form of social production. The analysis carried out by the classical economists themselves nevertheless paves the way for the refutation of this conception’ (Marx 1971 : 500–1 emphasis in original). As we now know, Marx was quite mistaken in his charge that Smith's analysis is ahistorical. A consideration of various parts of Book V of WN and LJ reveal Smith's deep appreciation for the historicity of economic analyses. 4 (I return to this question in section V below.)

Marx's final general attitude to Smith is that ‘While we cannot reproach Adam Smith for going in this analysis no farther than all his successors (although a step in the right direction could already be discerned among the physiocrats), he subsequently gets lost in a chaos and this mainly because his “esoteric” conception of the value of commodities in general is constantly contravened by exoteric conceptions, which on the whole prevail with him, and yet his scientific instinct permits the esoteric standpoint to re-appear from time to time’ (Marx 1967 a: 377). By esoteric Marx means deep, scientific; by exoteric Marx means popular, superficial. For Marx, the two go hand in hand in Smith's political economy.

There are many examples, especially from The Theories of Surplus Value , that point to Marx's extremely close reading of the technical side to Smith's work—particularly Books I and II of WN. Among these examples are Marx's extended interpretation of Smith's theory of productive and unproductive labour in The Theories of Surplus Value (Marx 1963 : 258–84, and his comment on Book I, Chapter X, ‘Of Wages and Profit in the Different Employments of Labour and Stock’ that ‘the chapter is full of acute observations and important comments’ (Marx 1968 : 231)). He discusses Smith on the difference between natural, sufficient, and ordinary price (Marx 1968 : 351–3) and spends an entire Chapter XIV, ‘Adam Smith's Theory of Rent’ (Marx 1968 : 342–72), on various technical issues. Comments on Smith's distinction between fixed versus circulating capital, and Marx's own claim that the crucial distinction should be between constant capital (which produces no surplus value) and variable capital (which does) can be found in Grundrisse (Marx 1973 : 727–43) and Capital (Marx 1967 a: 189–219). Additionally, Marx's comment on Smith's emphasis on fixed versus circulating capital as ‘a blunder’ is in Capital II (Marx 1967 a: 214). Where, a few paragraphs later, Marx concludes: ‘It is therefore understandable why bourgeois Political Economy instinctively clung to Adam Smith's confusion of the categories “constant and variable capital” with the categories “fixed and circulating,” and repeated it parrot-like, without criticism, from generation to generation for a century. The part of capital laid out for wages is no longer in the least distinguished by bourgeois Political Economy from the part of capital laid out for raw materials … Thereby the basis for an understanding of the real movement of capitalist production, and hence of capitalist exploitation, is buried at one stroke’ (Marx 1967 a: 219). Indeed, despite Marx viewing Ricardo to be the worthy successor to Smith's deep scientific side, and an implicit link from the correct side of Smith through Ricardo to Marx himself, Marx laments that ‘In Ricardo the uncritical adoption of the confusion [between fixed and circulating capital versus constant and variable capital] is more disturbing not only than in the later apologists, in whom the confusion of ideas is rather something not disturbing, but than in Adam Smith himself, because Ricardo, in contrast to the latter, is more consistent and incisive in his analysis of value and surplus value, and indeed upholds the esoteric Adam Smith against the exoteric Adam Smith’ (Marx 1967 a: 219).

Hence, Marx sets himself up as a grader, or corrector of Smith, contrasting what Smith says, with what Smith ‘should have said’ (see e.g. Marx 1968 : 345–57 where he actually uses this terminology). Of course, in general, Marx sees himself as able to ‘adhere to that part of Smith's exposition which is correct’ (Marx 1967 a: 383), to critique it, and to develop it in his own work.

Value theory

For Marx, Smith had both correct and incorrect views of what determines value. Marx shows the various aspects or confusions in Smith's thought on value theory, and develops one strand of it into his own embodied labour theory of value (Marx 1968 : 232). He explains: ‘The extent to which Adam Smith uses the correct definition of value, wherever he actually analyses [facts] can be seen at the end of the chapter where he examines why woollen cloths were dearer in the 16th century, etc. … The mistake here consists only in the use of the word price ’ (Marx 1968 : 371, emphasis in original. See also Marx ( 1968 : 405)).

The problem is that Smith seems to have several conflicting labour theories of value, due to his various inconsistencies on the cause of value (see Naldi in this volume). Smith switches between labour commanded, labour embodied, and subjective theories of value (Marx 1970: 59–60). Marx notices ‘The peculiar manner in which Adam Smith mixes up the measuring of value by the quantity of labour, with the price of labour or the quantity of labour which a commodity can command’ (Marx 1968 : 366, emphasis in original). Sometimes Smith even lapses into ‘physiocratic errors’ on the cause of value (Marx 1967 a: 360–1) and in doing so ‘contradicts the esoteric—really scientific part of his own exposition’ (Marx 1967 a: 212). 5 Yet, the real blunder according to Marx is when Smith goes to an adding up theory of prices, so that land and constant capital contribute to the production of value (Marx 1968 : 235). So again, there is a correct side and a wrong side to Smith, a deep side and a superficial side, a scientific and a vulgar side to Smith.

For Marx, one definition or formula of value is correct. The others are incorrect (Marx 1970: 59). He thinks it is scientifically correct that total value is produced by workers working and their surplus value is distributed among non-workers; rather than an adding up theory determining total prices and value. Therefore, ‘the vulgar conception however that wages arise from labour, but profit and rent—independently of the labour of the worker—arise out of capital and land as separate sources, not for the appropriation of alien labour, but of wealth itself, evidently creeps into Adam Smith's writing already at this stage. In this fantastic fashion, the profoundest concepts intermingle with the craziest notions’ (Marx 1968 : 347). The most profound concepts are the true, scientific (proto-Marxist) ones; the craziest notions the result of superficial analysis. Both intertwined in Smith.

So, in Marx's reading of Smith, ‘We have seen how Adam Smith first reduces value to wages, profit (interest) and rent, and then, conversely, presents these as independent constituent elements of commodity prices. He expresses the secret connection in the first version and the outward appearance in the second’ (Marx 1971 : 515). Starting from Smith's correct position, and then arguing against what Marx perceives to be Smith's subsequent superficial position, Marx claims it is not that landed property, capital, and wage-labour create value and surplus value. Rather, it is only wage-labour, workers actually working, that create value and surplus value. This surplus value is then distributed to various property owners. Marx, in typically incisive yet harsh language, concluded in Theories of Surplus Value that, ‘Adam's twistings and turnings, his contradictions and wanderings from the point, prove that, once he had made wages, profit and rent the constituent component parts of exchangeable value or of the total price of the product, he had got himself stuck in the mud and had to get stuck’ (Marx 1963 :103).

Money and capital

Marx largely follows Smith on the development of money and capital, but again, particularly in capital theory, he develops a radical side implicit in Smith. Smith's analysis of the origin of money largely follows Aristotle in the view that the exchange of commodities will necessarily generate money. 6 Marx, while criticizing Smith for minimizing his indebtedness to Steuart on the analysis of paper money, finds that Smith's ‘views on paper money are original and profound’ (Marx 1970: 168). For Smith money can be used to acquire more money, or revenue. Smith calls money used in this way capital. 7 For Marx, following Smith, capital employs living labour, but then Marx explicitly reaches a key conclusion opposite to that of Smith. Capital, for Marx, commands not only paid labour, but also unpaid labour. Hence, capital is really a form of exploitation or theft.

Note that for both Smith and Marx, when money is advanced by a property owner to a worker, it becomes capital. Smith writes: ‘In all arts and manufactures the greater part of the workmen stand in need of a master to advance them the materials of their work, and their wages and maintenance till it be completed. He shares in the produce of their labour, or in the value which it adds to the materials upon which it is bestowed ; and in this share consists his profit’ (WN I.viii.8: 83, emphasis added). In this Smithian formulation, the workers themselves (and not machinery or other physical equipment) are generating or producing the profits, the produce, or the value of their produce which are then ‘shared’ with their ‘master’. By Marx's reading, the workers are clearly creating value and surplus value which is then appropriated by their master. As Smith posits at another point, ‘The value which the workmen add to the materials, therefore, resolves itself in this case into two parts, of which the one pays their wages, the other the profits of their employer upon the whole stock of materials and wages which he advanced’ (WN I.vi.5: 66). So, in a sense, capital generates the capitalist, who then lives off profits or surplus value created by the workers. It is, of course, this potentially radical side of Smith and his formulation of capital that Marx picks up on and develops.

Thus, Marx interprets Smith as saying workers create all surplus value, which is the essential, true source of all property income: ‘Rent as well as profit are therefore, according to Adam Smith himself, but component parts of surplus-value and these the productive labourer reproduces continually together with his own wages’ (Marx 1967 a: 371). 8 Or again: ‘The capital converted into labour produces a greater value than its own. How? Says Adam Smith: by the labourers imparting during the process of production to the things on which they work a value which forms not only an equivalent for their own purchase price, but also a surplus-value (profit and rent) apportioned not to them but to their employers’ (Marx 1967 a: 374).

Joseph Schumpeter ( 1954 : 389) also notes this side of the relation between Smith and Marx. By Schumpeter's reading, Marx's ‘preconceptions about the nature of the relations between capital and labour, in particular, he simply took from an ideology that was already dominant in the radical literature of his time. If, however, we wish to trace them further back, we can do so without difficulty. A very likely source is WN. Smith's ideas on the relative position of capital and labour were bound to appeal to him, especially as they linked up with a definition of rent and profits—as ‘deductions from the produce of labour’ (WN I viii, 8: 83)—that is strongly suggestive of an exploitation theory’.

So Marx takes this side of Smith and explicitly develops it into his own deep exploitation theory. For Marx, the capital is created by the workers, and in value terms, capital is really embodied dead labour. Therefore, it is as if dead labour hires or consumes the living labour. The dead labour then sucks surplus value created by the live labour, vampire-like. The capital hires the workers, and the more capital there is in society, the more workers will be hired by capital. In capitalist society, the workers are controlled by the produce of their labour. For Marx, ‘the division of labour develops the social productive power of labour or the productive power of social labour, but at the expense of the general productive ability of the worker. This increase in social productive power confronts the worker therefore as an increased productive power, not of his labour, but of capital , the force that dominates his labour’ (Marx 1968 : 234, emphasis in original). Hence, the workers, instead of ruling their products, are ruled by their products. For Marx, as opposed to Smith, a communist revolution would be the welcome means to free humanity and to reclaim this alienated power.

In terms of character analysis, Marx again largely agrees with and follows Smith, but, once again, develops the critical radical side to his analysis. This is seen especially in what manufacturing enterprises do to the character of workers. Marx again goes further than Smith on this issue, and also on the later degradation of the character of workers in what Marx calls the machine age of capitalism. Both Smith and Marx are similar in that they emphasize it is what people do in their day-to-day lives, particularly how they relate to their economic activities, that largely determines their characters. In a sense they can both be seen as materialists. Ronald Meek is one of the few people who sees and correctly emphasizes this commonality between the two:

It could very plausibly be argued, indeed, that it is in Smith's numerous remarks about the influence exerted upon the character of individuals, social classes and nations by the manner in which the people concerned get their living, about the relativity of manners and morals to time and place, and about the socio-economic determinants of political attitudes, literary styles, consumption patterns, etc., that the main similarities between his approach and Marx's are to be found. (Meek 1977 : 15–16)

So, for example, Smith's view that morals will to some extent be a function of the job a person performs in society, their social rank or class, and the general level of socio-economic development in society (be it, of course, a hunting, shepherding, farming or commercial society) can be seen in TMS, Part V, ‘Of the Influence of Custom and Fashion upon the Sentiments of Moral Approbation and Disapprobation’. 9 Smith's view that rhetoric will also partly be a function of the type of society is addressed in, for instance, LRBL, Lecture 26 (see Swearingen in this volume). Indeed, that language itself arose historically and that it too changes over time—so for example there will be systematic differences between ancient languages such as ancient Hebrew and Greek and Smith's contemporary languages—is one of the key claims of the ‘Considerations Concerning the First Formation of Languages’. 10 That marriage, love, and therefore plays, operas, and literature about marriage and love are also to some extent functions of the level of socioeconomic development, the nation's inheritance laws, etc. are described in the lecture Smith gave on Tuesday, 8 February 1773 (LJA iii.4–49: 142–59). The various virtues themselves, including truthfulness, probity, punctuality, courage, etc. are also to some extent a function of the stage of development (LJB 327–33: 538–41). Finally, in WN V.i.a, and also in WN V.i.f, ‘Of the Expense of the Institutions for the Education of Youth’, especially V.i.f.59–60, Smith describes the ability of a nation to defend itself in terms of the level of socioeconomic development and underlines this with an analysis of the historical variations in societal estimates of and therefore the possession of the virtue of courage.

Many more examples of what may be termed materialist similarities between Smith and Marx could be enumerated. Yet, we might also note that to some extent Marx himself downplayed this commonality. Take, for example, the effect of the division of labour on character. In Marx's critical estimation, ‘Adam Smith said nothing at all new about the division of labour. What characterizes him as the quintessential political economist of the period of manufacture is rather the stress he lays on it’ (Marx 1976: 468, fn. 19 ). Whereas, in Marx's own story, tools are simplified, and workers get divided into skilled and unskilled labourers; both classes of workers are separated from their means of production, forcing them to work in the capitalist-owned factories. On the downside to this division of labour, that increases in the division of labour increases productivity, yet hurts the character of the worker, Marx does indeed follow Smith. As is relatively well-known, the deleterious effects of the division of labour are developed most extensively, relatively late in Smith's WN, tucked (or arguably buried) in Article Two, ‘Of the Expence of the Institutions for the Education of Youth’ of Part III, ‘Of the Expence of publick Works and publick Institutions’ of Chapter I ‘Of the Expenses of the Sovereign or Commonwealth’ of Book V. It is here that Smith elaborates upon the damage done to the workers’ character by the increase in the division of labour, in contradiction to the positive stress placed upon increases in the division of labour (due to increasing productivity and hence the wealth of nations) in most of the rest of the treatise. 11

In Capital , Marx also describes how under capitalist development the ‘development in a man of one single faculty [comes] at the expense of all others …’ (Marx 1976: 474). In this part of his complex story, Marx is quite Smithian. For Marx, following one side of Smith, manufacturing ‘converts the worker into a crippled monstrosity’ (Marx 1976: 481); he is ‘transformed into the automatic motor of a detail operation’ (ibid.). The worker becomes an appendage of the workshop which ‘mutilates the worker, turning him into a fragment of himself’ (Marx 1976: 482). Marx does quote Smith on this issue.

For Marx, with manufacturing enterprises there is a ‘crippling of the individual worker. It produces new conditions for the domination of capital over labour’ (Marx 1976: 486). Things get even worse for the character of the workers with the development of machinery, the machine age of capitalist development which entails the further deskilling and degradation of the worker. 12

So Marx is concerned with the deleterious effect of work on the labourer. He shares this concern with Smith, although Marx goes in much more detail, at greater length, and with more emphasis than Smith does in WN. Indeed, a generation or so ago there was a debate about the role of alienation in Smith's analysis, inspired largely by the availability in English of some of the writings of the so-called young Marx. So, for example, Lamb ( 1973 ) argued that Smith anticipated worker alienation identified by Marx in his early works as self-estrangement, isolation, and powerlessness. West ( 1975 ) countered this arguing that alienation was not a significant issue for Smith. Yet, I think the key point on this issue is the following. By reading the British economists in general, and especially Adam Smith, given Marx's philosophical and radical background, one can now see how a young brilliant mind took the idea of alienation in the previous German philosophical sense of alienated power to the state or religious authorities, and applied it to alienated labour in civil society. In the appropriately named Economic and Philosophical Manuscripts of 1844 Marx sees alienated economic labour as the root of private property and the wealth in capitalist society. Moreover, the key source of inspiration to apply the German philosophical concept of alienation (which Marx already intimately knew) to labour, and to work out the implications of this transference, was very likely Adam Smith himself. Marx, referring to the man who would become his lifelong friend, Engels, writes that he ‘was therefore right to call Adam Smith the Luther of political economy ’ (Marx 1975 : 342, emphasis in original). For Marx, Luther put humans directly into the province of religion and negated the idea or need for priests. Similarly, Marx interpreted Smith as making human labour, or more precisely alienated human labour, the true source of private property and wealth, with most all wealth being owned by non-labourers and hence in reality appropriated from the workers. For Marx, it takes scientific work to understand and expose this deep truth about capitalist society. Marx would spend the rest of his life working out the implications and details of this synthetic philosophical-economic vision. 13

Marx was, of course, above all else, a revolutionary; Smith much more of a reformer. A reason for this key difference was their different attitudes to what may be termed the opportunity cost of what Smith called commercial society, what for Marx was capitalist society, or the capitalist mode of production. I will turn to this issue, after a brief discussion of their rather surprisingly similar attitudes towards the state in class societies.

The state and change

Marx and Smith's position concerning the state is quite similar. For both, the state in commercial or capitalist society has certain functions to fulfil. Also, for both, the state may be seen to be a tool or instrument to protect property. For Smith, the state tends to be ruled by and in the interests of the rich and powerful. This is a major reason why Smith wants the state in commercial society to be relatively small: to help protect the non-rich, and the non-powerful from the state. Also, for both Smith and Marx, the state and the development of property, are historically specific. For Smith they largely depend upon the stage of development of society; for Marx, upon the mode of production. Again, the similarities are striking. However, Marx (and probably most Marxists following him) did not see or appreciate this side to Smith. Instead, Marx saw Smith as ahistorical (Marx 1973 : 83; 156).

What is the source of the misunderstanding of Smith's ahistoricity? There are, I believe, several reasons. One is that, particularly in the early books of WN, Smith does indeed appear to be ahistorical. With his emphasis on the natural, and his early memorable story of beaver-killers in a hunting society exchanging their kill in a ‘natural’ exact proportion with that of their associated deer-killers based upon the labour time required to terminate their respective prey (WN I.vi.1: 65), it would be easy to conclude that Smith imagined a commercial, capitalist-like society to have always existed. I suspect for rhetorical, persuasive reasons, Smith himself at that stage of his presentation of the inquiry into the nature and causes of the wealth of nations was not amiss to encouraging that misinterpretation. 14 Of course, from a close reading of Book V of WN (to be further discussed immediately below) and particularly with the publication of LJ, it is clear that this interpretation of Smith is erroneous. Yet, another argument can also be made that compared to Marx himself, Smith is relatively less historical, or perhaps less evolutionary: for Marx humans themselves essentially and fundamentally change over historical time. To take one important example, for Marx, over time, ‘human needs are produced just as are products and the different kinds of work skills’ (Marx 1973 : 527). History for Marx is clearly (among other things) the development of new human needs; in contradistinction, for Smith over time humans are simply able to better and more easily fulfil old needs (Berry 1994 : 177–95). That is to say that, for Marx, over time human needs and their essential beings change and evolve while this was probably not part of Smith's vision. So there remains a difference in degree between the historicity of Marx and Smith. 15

Returning to the issue of the state, the question arises: why is there a streak of antipathy in Smith towards government in general? I think because in some key ways, Adam Smith has what may be termed a Marxist theory of the State. The careful reader, plodding through Smith's masterpiece, may indeed be surprised upon coming to Book V, the last book of WN. In explicitly discussing the necessary expenses of the state, Smith suddenly introduces a four-stage theory of socio-economic development. In explaining the expenses of defence and justice, it turns out that, according to Smith, government arises at a definite stage in history, with the development of private property. Indeed, the origin of government is to protect private property, particularly that of the rich (WN V.i.b.2: 709).

This is pretty much what we might now call the Marxist theory of the state. The state arises at a definite stage (or level) of socio-economic development. It does not really exist in hunting societies. Nevertheless, according to Smith: ‘Civil government, so far as it is instituted for the security of property, is in reality instituted for the defence of the rich against the poor, or of those who have some property against those who have none at all’ (WN V.i.b.11: 714). Yet, unlike Marx, Smith largely emphasizes that this is good. The rise of private property and the state which protects this property is basically desirable; it is at least as good or desirable as is possible for such frail creatures as humans. It would be much worse to not have a state. Indeed, what Smith sees as crucial about commercial society, is the rule of law, and in principle, equal liberty under law. Nevertheless, at the same time, for Smith, ‘The violence and injustice of the rulers of mankind is an ancient evil, for which, I am afraid, the nature of human affairs can scarce admit of a remedy’ (WN IV.iii.c.9: 493); and, ‘All for ourselves, and nothing for other people, seems, in every age of the world, to have been the vile maxim of the masters of mankind’ (WN III.iv.10: 418). For Smith, at a certain level of socio-economic development, the state is a necessity; yet, it can itself be a source of violence and injustice. 16

The most famous statement of Marx's view of the state probably comes in The Communist Manifesto (jointly written with Engels): ‘The executive of the modern state is but a committee for managing the common affairs of the whole bourgeoisie’ (Marx 2005 : 43). Now, there are several reasonable ways to interpret Marx's position concerning the state. On the one hand, one can take a largely functional viewpoint, as taken by people such as Poulanztas ( 1973 ) and Reuten and Williams ( 1989 ). Here, the capitalist state has various functions which it needs to fulfil in order to help in the reproduction of the capitalist socio-economic system. This is quite similar to Smith's position in WN. Smith, of course, never wrote his book on ‘the general principles of law and government’ (TMS: VII.iv.37: 342). Yet, what we have in WN, particularly in the very long Chapter 1, of Book V (‘Of the Expenses of the Sovereign or Commonwealth’), and also scattered throughout the treatise, is an enumeration of various things or functions which the government ought to perform in his commercial society. So, in this sense, Marx and Smith are quite similar in their view that the state has certain functions to fulfil.

One can also adopt a more straightforward interpretation of Marx's position, that the state is a tool or instrument largely used by the ruling class to further its own interests. Marx seems to have this position when he writes in The German Ideology that ‘the state is nothing more than the form of organization which the bourgeois by necessity adopts for both internal and external purposes as a mutual guarantee of their property and interests’ (1967b: 470). Here, the state is a tool or instrument, and from a Marxist point of view the state itself becomes an object of class struggle. This was the approach taken by people such as Ralph Miliband ( 1969 ) and his followers. Again, this is not too different from Smith's position. Although Smith does not stress it in WN, government may be viewed to be a tool or institution which arises with the growth of private property, at a particular time in the evolution of history. Indeed, the mercantilists and businessmen whom Smith railed against were using the state as a tool to help further their own narrow economic interests to the detriment of the rest of the nation.

The chief difference between Marx and Smith is one of attitude towards change, opportunity costs, reform, and revolution. Both have what may be termed a modern, largely evolutionary theory or view of human history. Both may be termed materialistic because they both stress the importance of day-to-day ‘economic’ or material activities in determining or at least largely influencing government, laws, culture, etc. Smith has a four-stage theory of socio-economic development. Marx has various ‘modes of production’, each of which largely succeed each other in historical time. 17 Yet, comparatively speaking, Smith looks backward, and sees commercial society as largely superior to previous societies, while making various suggestions for reform of his current society. Marx looks more to the future, and thinks that present society is so much worse than what the future can hold; hence, the need for radical revolution to overcome the structural contradictions that plague capitalist society.

We might also note that the very idea of being subsumed to the dictates of economic markets is, in Smith's view, an improvement upon previous forms of personal servitude, 18 while Marx vehemently opposes this condition as inferior to what could occur in the near future. Marx does not want humans bound, dictated to, or subservient to economic markets. 19 He thinks humans can get to a post-market and hence vastly improved society. This was not really an option considered by Smith. 20 Smith looked backwards in history at feudal relations of production and personal servants, and felt that this form of society was generally grossly inferior to commercial market relations. He tried to figure out ways to improve commercial market relations through gradual reform. Marx looked more to the future, thinking we could get past the anarchic dictates of the market and realize a higher form of human existence. Was he being utopian? 21

This chapter has argued that there are many similarities in the work of Adam Smith, often seen as the great defender of commercial or capitalist society, and Karl Marx, the proponent for the revolutionary overthrow of capitalism. These similarities are particularly evident in value theory, the theory of money and capital, the development of character, and their theories of the state and historical change.

Indeed, Marx was a very close, careful, subtle reader of Smith. He develops a radical anti-capitalist side, which is largely implicit in Smith, to help create what is the subtitle of Capital : a genuine Critique of Political Economy . According to Joseph Cropsey in his Polity and Economy , ‘An axiomatic premise of this study is that capitalism is an embodiment of Smithian principles. Hence, the interpretation of Smith's teaching must also be an interpretation of capitalistic society’ (1957: ix). From either a Smithian or a Marxist point of view, Cropsey no doubt offers an overly idealistic version of the relationship between Smith's work and capitalist society; nevertheless, in essence Cropsey is quite correct. An interpretation or critique of Smith's teaching is also an interpretation or critique of capitalist society itself. Moreover, it may very well be that Marx's critique of capitalist society is as relevant today as it was 150 years ago—possibly more so. But that would be the subject of, at least, another paper.

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I would like to thank Christopher Berry for his insightful comments on an earlier version of this chapter.

For my view on Rothbard's interpretation of Smith, see Pack ( 1998 ). For twenty-first-century interpretations that Smith was also a progenitor and inspiration for social democracy (in addition, of course, to Marx and various conservative schools of thought) see Jones ( 2004 ) and Fleischacker ( 2004 ); such a profoundly seminal author!

For Marx, vulgar economists ‘ceaselessly ruminate on the materials long since provided by scientific political economy, and seek there plausible explanations of the crudest phenomena for the domestic purposes of the bourgeoisie. Apart from this, the vulgar economists confine themselves to systematizing in a pedantic way, and proclaiming for everlasting truths, the banal and complacent notions held by the bourgeois agents of production about their own world, which is to them the best possible one’ (Marx 1976: 175 fn. 34).

See e.g. Pack ( 1991 : 119–37). Marx, of course, did not have access to Smith's jurisprudence course lecture notes. Nevertheless, I think it is clear that Marx studied much more closely the first two theoretical books of WN than the latter books. For more on this see Section V below.

Note also Marx ( 1963 : 70): ‘Smith is very copiously infected with the conceptions of the Physiocrats, and often whole strata run through his work which belong to the Physiocrats and are in complete contradiction with the views specifically advanced by him … For our present purpose, we can completely disregard these passages in his writing, which are not characteristic of himself, but in which he is a mere Physiocrat’.

See Pack ( 2010 ) which traces out the relationship between Aristotle, Smith, and Marx in much more detail, and from which much of the material in this chapter is drawn. On the pivotal importance of Aristotle's work on money up to modern times, see also Schumpeter ( 1954 : 62–4).

Aristotle calls it chrematistics.

Engels (1967) does too.

Note by the way from this Part of TMS it is clear that for Smith moral sentiments are a subset of general aesthetics, moral sentiments being basically the judgment (or in part feeling) of beauty of the soul. General aesthetics are of course also a function of the variables noted in the main text. Note also there is no mention of God, the all-wise Author of Nature, the great Judge, the Deity, etc., in this Part since it deals with the historically specific, and with particular institutions; not ahistorical deep structures of the human species.

See also Berry's (1974) commentary. Note in passing that in this article Smith makes clear that he did not read Hebrew.

See e.g. Pack ( 1991 ); also Heilbroner ( 1975 ) and Rosenberg ( 1990 ).

The classic elaboration of this train of thought in Marx (and hence of Smith) in the twentieth century or the age of ‘monopoly capital’ is Braverman ( 1974 ).

We must be careful not to overemphasize the youthfulness of the so-called young Marx. When Marx penned these 1844 manuscripts, he was the same age as Einstein when Einstein published his 1905 path-breaking articles (including the two on what would become known as the special theory of relatively); just two years younger than Hume was when the first two books of his Treatise of Human Nature were published in 1739.

See Pack ( 2010 : 61–5) where I argue that Smith used this terminology in part to argue against the Aristotelian view that chrematistics, the use of money to acquire more money, was unnatural; and, also to open up space from potential religious censurers by emphasizing that he was dealing with natural, as opposed to supernatural issues.

In terms of theory, the key person on this issue is probably Hegel. The relationship between Hegel and Marx is well known; that between Smith and Hegel, not so much. In terms of the material cause of this change in thought, I suspect it was probably that Europeans gradually realized they were completely exterminating various species (think, e.g. the dodo bird). If animal species could historically die out, then new ones must arise, or essentially evolve over time; including humans.

Smith is here echoing the sentiments of the author(s) of Samuel I on the rise of the state in ancient Israel, with the establishment of Saul and then David's monarchy replacing the previous decentralized system of judges. This Biblical Book is one of the oldest texts we have on the rise of a state, and it merits close study for that, among other reasons.

On this I think they were both largely influenced by Aristotle's Politics 1256a–b. Yet, Aristotle, of course, had a pre-modern cyclical view of human history. See Pack ( 2010 : 208–10).

See Perelman ( 1989 ).

See e.g. Grundrisse (Marx 1973 : 158, 162, 196–7).

Recall, of course, that Smith wrote the Wealth of Nations in the decade before 1776; when it would have been very difficult for Smith to envision a stage beyond capitalism (or commercial society).

Of course, even to ask this question risks the posthumous wrath of Marx. Both Marx and Engels insisted they were scientific socialists, not utopian socialists (see e.g. Communist Manifesto , ch. 3, Section 3, ‘Critical-utopian Socialism and Communism’ (2005: 82–6)). But Marx was well aware that this was an issue for him too, e.g.: ‘… if we did not find concealed in society as it is the material conditions of production and the corresponding relations of exchange prerequisite for a classless society, then all attempts to explode it would be quixotic’ (Marx 1973 : 159).

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Analysis of The Ideologies of Adam Smith Vs Karl Marx

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Difference Between Adam Smith and Karl Marx

• Categorized under Business | Difference Between Adam Smith and Karl Marx

Adam Smith vs Karl Marx

Amongst the most influential and prominent economists of the last few centuries, Adam Smith and Karl Marx, are noted for their distinct theoretical contributions. In his watershed Inquiry into the Nature and Causes of the Wealth of Nations, Adam Smith proposed that the free market, where producers are free to produce as much as they want and charge consumers the prices they want, would result in the most efficient and desirable economic outcome for consumers and producers alike due to the “Invisible Hand.” 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 derived from a good, and producers would only sell for as much as or higher than they would have spent on producing a good. In his idealistic economy, there would be no surplus or deficit supply 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 Marx in his Das Kapital reasoned that workers would be exploited by any capitalist, or factory owners, for the capitalist system provides an inherent advantage to the already rich and a disadvantage to the already poor segments of society. 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 contentious theories – the labor theory of value – 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 forever remain stuck in their respective classes because of the very nature of capitalism. The wealthy capital-owning bourgeoisie not only owns the factories but dominates the media, universities, government, bureaucracy, and, hence, their grip on an elevated social status is unchangeable. In contrast, the poor, working class, or the proletariat, lacks any effective means of having just recompense for their hard labor. The remedy for this trouble, in Karl Marx’s view, was for the proletariat to revolt and create a new social order where there would be no distinction between segments of society; there would be no classes as such. Collective ownership of all capital for production would ensure, Marx suggested, an equitable distribution of wealth.

While Adam Smith contended that the most ideal economic system is capitalism, Karl Marx thought otherwise. Adam Smith also opposed the idea of revolution to restore justice for the masses because he valued order and stability over relief from oppression. Marx strongly adhered to the idea that capitalism leads to greed and inequality. Inherent to the idea of competition is greed, opined Karl Marx, which would cause inherent instability and injustice in a society. Communism offered the best model – both political and economic – with its collectivist ownership, production and central planning features intended to distribute wealth equitably and eliminate the distinctions between the bourgeoisie and the proletariat altogether, according to Marx. Smith did not put the spotlight on the land holdings or the riches of the aristocracy like Marx. Smith elaborated on how a person could reap economic benefits commensurate to his effort and thus add to an economy’s aggregate wealth. He believed that in a free market economy, an individual would be able to earn and spend in a market freely, and it would allow a worker to act as a consumer as well. When a worker would purchase goods and services, it would then lead to profits for some other economic agent – a producer or a consumer of economic goods or services – and further boost economic activity. According to Smith, the benefits to an individual economic agent would be enjoyed by many other members of society through a “trickle effect” as the original worker would spend money, which would be earned by some other producer of goods or services, which would allow the second economic agent to earn and then spend money, and the cycle would continue which would help the economy multiple times more than what it may appear at first sight.

In contrast, Karl Marx theorized that capitalism is intrinsically linked to an inequitable society where the segmentation of society according to “class” would be permanent and rigid. Somebody born in the proletariat class would forever be stuck in this class, and somebody born in the bourgeoisie would always enjoy the benefits of the aristocracy at the expense of the proletariat. He thought that the proletariat would be looking to maximize their own profits, and, in turn, keep the wages of the working class as low as possible, thus trapping the working class members in a vicious cycle of abject poverty or destitution that they can never escape from.

One of the faults with capitalism that Karl Marx discovered was the tendency for each economic agent to maximize his profits. He contended that the value added by a worker is more than the wages he earns; the difference being the profits enjoyed by the capitalist. By eliminating the capitalists altogether, his ideal economic system would be more equitable, just, and fair than unhindered capitalism without government intervention, private ownership of property, competition, and so on.

In conclusion, while both Adam Smith and Karl Marx agreed on a few core ideas, they differed on the method of production of goods and services and distribution of resources. Whereas Karl Marx went so far as suggesting revolution by the proletariat against the bourgeoisie for a more just, equitable society, Adam Smith preferred stability and peace over revolution. While Adam Smith’s envisioned ideal society would not distribute resources equitably or eliminate gaping wealth levels between the different classes in a society, Marx’s ideal economy would produce, according to the directives from a central authority, and distribute resources according to the needs of the public. In his ideal economy, Marx envisioned the elimination of class distinctions and an appropriate valuation of a worker’s effort, which is not possible in a capitalistic society in the presence of profit-seeking capitalists who deprive workers of their full share of earnings, according to Marx.

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19 Comments

NICE, simple, and straight to the point. This was extremely helpful.

Very helpful I tell you.

This does not take into account key areas of either theories, and would not pass a Wikipedia article tests for accuracy and/or unbiasedness. These great minds’ theories deserve better treatment than that, in my opinion.

this is about 90% inaccurate. a simple reading of both works would lead one to see that adam smith anticipated marx eighty years later. smith was incredibly critical of the division of labor, for example, and is just as blunt about it later in wealth of nations as marx was. or one could simply google “the vile maxim of the masters.”

Smith critical of the division of labor? No, Smith wrote ‘The Wealth of Nations’ highlighting labor as the central economic determinant. Smith wholly believed that the division of labor created an advanced manufacturing economy.

Get rekt kid

I’ve read a lot of “differences between” in this page, and most of the time it is very helpful. But I found myself in some kind of moral compulsion to say that this particular article is mostly wrong.

I agree with other comments that this article has untenable descriptions or explanations of both theories. Both were lucid and critical economists, both with highly developed libertarian ethics, none wich such myths about the wellfare of societies or the happiness of humans. Please erase or change this “difference between”, it’s most harmful for anyone who wants to learn

I read your note below about general information, “as is”, and “with all faults” articles; but this is wrong even as general information. Smith’s and Marx’s theories are not even “as” this, and I hope you want to not give-for kindness, of course- this almost entirely fault.

I repeat, this is generally a great site for me; that’s why I’m giving my point for making it better. Thank you!

NOBODY CARES FAGG .

it has seem to me i find this comment quite rude and to be in fact that yes nobody cares but youre a fagg

If nobody cares then why did you look it up fag?

“He thought that the proletariat would be looking to maximize their own profits, and, in turn, keep the wages of the working class as low as possible, thus trapping the working class members in a vicious cycle of abject poverty or destitution that they can never escape from.”

Wouldn’t the bourgies be trying to maximize their own profits, instead of the proletariat?

Karl Marx-Communist Believed Government should have control over businessess and that no one makes more or does better than the other.

Adam Smith-Socialist Believed that people should have the right to a free-market economy and do whatever they please.

And the concepts that are given are clearly defined by the teminology if you read this artical properly (See capitolism and other terms).

Your definitions are off by a long shot,

Communism: A classless, stateless, moneyless social order where all private property (productive property) is owned by the people.

Socialism: A social and economic system where the means of production are democratically owned and managed by the people. In Marxist theory, this stage occurs after capitalism.

Capitalism: An economic system where trade, industry, and the means of production are owned privately.

Both Socialism and Communism are opposed to both government and private ownership, and instead promote democratic ideals. The “Communism” you described, which was practiced in the Soviet Union and Maoist China, is best aligned with State Capitalism.

I think that the author has simplified the Marx’s theory. Marx explained how the capital system works based on surplus value theory, which further explains why the economic crisis keep occurring in cycles. He disagreed with Smith for the “Invisible Hand”. Otherwise the capitalism will always be in equilibrium and the economic crisis like the one in 2008 in US will never happen.

This was helpful for a History report. Thanks

@GAYBOYSWAG you’re a fagg

This was a poorly conceived, poorly researched article with awful grammar throughout to boot. This would barely pass muster in a remedial 5th grade English class, and even then, the teacher would be obligated to correct the conclusions reached.

Also, the children who A. engage in name calling and/or B. made their user name ALL IN CAPS have about as much to offer intellectually as a rock with noticeably impaired mental acuity when compared to normal rocks. If you folks haven’t considered suicide before, now might be a great time to start. Save our country’s few special ed dollars for the kids that actually give a fuck about learning.

dat irony doh

Great post.

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Written by : Prabhat S. and updated on 2017, October 25 Articles on DifferenceBetween.net are general information, and are not intended to substitute for professional advice. The information is "AS IS", "WITH ALL FAULTS". User assumes all risk of use, damage, or injury. You agree that we have no liability for any damages.

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