Adam Smith And 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

One famous and contested school of thought is Classical Economics. The school of Classical Economics has been called the “first modern school of economic thought.” One of the most famous economists of this genre is Adam Smith; some also place political-economist Karl Marx in the company of Classical economists. Adam Smith and Karl Marx are polar opposites in the political-economic spectrum proponents of capitalism and socialism, respectively. Despite their political differences, they share some similarities; though much of their philosophy has been debated and replaced by the Austrian School of Economics, there are points of value to both Adam Smith’s and Karl Marx’s

Cars do not pop out of thin air there is a process by which steel, rubber, durable plastics, glass, and other materials are put together by both machines and people to create a car. In its crudest form, capitalism works in this way; after the car is created, people who a car need would then go to the car factory and purchase the car for the amount that they are willing and able to pay. In our capitalist society, there are a few other intermediate steps; people just do not walk into one of Ford’s factories and request to buy a Mustang. The cars are bought by a dealership and then sold to customers. The main point, after the extensive example, is that capitalism can be broken down into two essential parts, production and consumption. Without the production portion, nothing can be consumed. This law is applicable in everyday life. One cannot eat without acquiring prepared food, one cannot live in a house without it having been constructed; one cannot buy goods at a market or store without the goods being produced and supplied by another