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Smith Vs Marx

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Although there are times when the three of them are in agreement, most of the time their interpretations of capitalism diverge. An area of agreement is the specialization and the division of labor. Smith argues that this division comes naturally as the market space where people can pursue their interests expands. Even though Marx insists that the division of labor is detrimental to laborers, he admits that this organization of production comes out of the division of classes and is a necessary condition for the emergence of capitalism. Weber describes this division of labor as the formally free, rationally organized labor (Hayek xxxiv). In fact, this notion of formally free labor is supported by Smith’s example of the pin factory in The Wealth …show more content…

For instance, Smith and Marx disagree on the role of natural force. While Smith is a functionalist who argues that natural market force brings everything back to equilibrium, Marx claims that equilibrium is not the norm; rather, crisis is. Marx contends that a crisis arises from the fact that “the bourgeoisie cannot exist without constantly revolutionising the instruments of production, and thereby the relations of production, and with them the whole relations of society” (Tucker 476). However, this seemingly powerful characteristic of capitalism will cause the society to regress into a "state of momentary barbarism" (Tucker 478). According to Marx, as a result of overproduction, all supply of production is no longer accessible and all “industry and commerce seem to be destroyed” (Tucker …show more content…

Marx views the Bourgeoisie and the Proletarians as fundamentally different people at the level of consciousness. Moreover, these two classes are fundamentally divided. Weber, though, would disagree by arguing that both businessmen and laborers are Protestants, which means that they have the same cultural origin and are essentially the same group of people. In fact, God will be pleased by both groups of people if they worked hard despite the fact that businessmen earn much more than laborers do (Hayek 121). This divide between Marx and Weber leads to two distinct yet both insightful origin stories of capitalism. Actually, both of their analytical efforts enable us to interpret the social realities of modern

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In his essay, “I Pin,” Horace Say critiques Adam Smith’s story of a pin factory and puts the work in the perspective of a modern day economist. Adam Smith wrote heavily about how industries, especially manufacturing, can benefit from a division of work within the system. I saw this way of labor as the most effective as it lessened the intensity of one man’s work and, in the end, it greatly affected the rate of production. He believed that the workers should be divided to do specialized tasks based on their certain skills or strengths. He used the example of a pin manufacturer to support his claim.

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In Smith’s theory, he focused on the individual, but Marx preferred to pay much more attention on a specific social class. Marx says, “The distinguishing feature of Communism is no the abolition of property generally, but the abolition of bourgeois property (Marx, 1848).” For example, proletariat needed to build a new social class through revolution, and abolition of private property needed to be established in society. Marx had also offered other policies that helped to get rid of the different class distinctions between bourgeois and proletariat and distribute the wealth equally such as “abolition of all right of inheritance, exclusion of monopoly, equal liability of all to labor, and a more equable distribution of the population over the country (Marx, 1848).” These policies not only prohibited one to hold certain power and rights to rule others, but they also promoted the equal distribution of wealth in

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532 Words | 3 Pages

The Marx approach focuses on economic factors as the sole reason for conflict in society. He saw society divided into the Bourgeoisie, or the owners of the means of production, and the proletariat, or the workers. Tensions and conflicts occur when the resources, power, and status are unevenly distributed between these two groups, and the conflict can lead to social change. He believed the exploited people would bane together and attempt to bring about changes. The workers would develop a class consciousness and revolt demanding more changes in society, while those with the wealth, power and prestige will continue to try and promote their own interest usually at the expense of the weaker

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The economic views of Adam Smith and Karl Marx Microeconomics Eduardo De Oliveira Superti   Table of Contents: Abstract 3 Introduction 4 The economic views of Adam Smith 5 The economic views of Karl Marx 6 Adam Smith vs. Karl Marx 7 Examples in the world of today 9 Conclusion 10 Recommendations 11 Bibliography 12 Introduction Adam Smith and Karl Marx were completely contrasting economists throughout their time and had an enormous effect on the world and the way we view economics. They represent the ideas of capitalism and socialism.

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He believes that the wealth of the nation is increased by the increase of production, the increase of trade, improvement of technology, and expansion of the nation’s market. He believes that all of these things can be the result of division of labor between different classes. I think that Adam Smith would agree more with Ure because these ideas align with the support of industrial capitalism, which is what Ure believed in as well. Even though Smith and Ure may not agree with industrial capitalism for the same reasons, they were both still supporters of it, whereas Marx was not as much of a

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Adam Smith, an advocate of capitalism, in his book, The Wealth of Nations wrote that all individuals are selfish and by performing to the best of their capabilities towards their own selfish interests they contribute towards the nation’s collective growth. Karl Marx, on the other hand criticized capitalism and believed that socialism and communism are society’s best chance of maximizing individual happiness, about which he wrote in his book Das Kapital. In this paper, we will compare and contrast the economics theories of Adam Smith and Karl Marx on the lines of labor theory of value, division of labor, alienation of workers from labor and human happiness and surplus profit and its social implications. This paper will also discuss how… Adam Smith believes that there are two types of ‘values’ of a commodity – ‘utility value’ and ‘exchange value’. The utility value of a commodity is based on how useful a commodity is and the exchange value of a commodity refers to how much we can get in exchange for a commodity if we were to sell it.

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The Industrial Revolution cast its shadow upon European cities and towns. Some enjoyed this shade while others suffered tremendously because of it. Those who enjoyed the luxuries and wealth that the Industrial Revolution provided, the bourgeoisie, depended on the needs of the poor, the proletarians, to increase the size of their monstrous factories and ultimately their wealth and influence. In “The Communist Manifesto” Karl Marx discusses the effects of the Industrial Revolution in further dividing society by creating new social and economic hierarchies. In addition to his observation of the division of labor, Karl Marx believed, that due to the technological shift from craftsmanship to machinery this also caused division of labor and the appreciation of proletarian handmade goods was disregarded.

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Ayse Meryem Gürpınar Akbulut October 11, 2016 SPL 501 / On Adam Smith and Karl Polanyi Adam Smith and Karl Polanyi are philosophers of two different eras, 18th and 20th centuries respectively. While the former witnessed early periods of the capitalist system with the emergence of the industrial revolution, the latter had opportunity to analyze the consequences of a mature capitalist system. Since both of them believe in social being of humans, they differ in methodological terms while analyzing the human beings. Smith, as employing the methodological individualism, focused on the human nature and human behavior. According to his perspective, a socio-economic system emerges through individual tendencies, intentions, and behaviors without

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908 Words | 4 Pages

Durkheim identified this change through the division of labour which he believed would lead to anomie -the breakdown of morality in society- (Barbaris and Jones: 2011). Durkheim (1893: 276) argued that “the division of labour unites at the same time that it opposes” because though the concept of a division of labour rids society of simple mechanic solidarity, thus opposing the simple way of life that was found in a pre-industrialised society, by having industrialisation, it allows for the build-up of a new way of collective conscience. In a similar vein, according to his manifesto (Marxists.org), Marx also believed in the division of labour, thinking that industrialization made the dichotomy between the proletariat and the bourgeoisie much more apparent. Like Durkheim’s concept of anomie and the breakdown of norms, Marx argued that the division of labour encourages alienation leading to a feeling of disassociation among the labourers with the product of their labour, due to it all being monopolised by the bourgeoisie. Yet, unlike Durkheim, Marx thought that the division of labour would promote less autonomy and minimise their collective conscience, therefore leading them to think they need the support of their employer rather than their

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759 Words | 4 Pages

He argues that with all the pressures of class conflict and the imbalance of capitalism there is no way that this pattern can continue without a major revolution. Marx compares capitalism to anarchy, in the sense that there is no organization within which only causes chaos. The common pattern of capitalism is a boom followed by a bust, and that bust leads to recession and social unrest. This sort of fickle economy, Marx believes, will furthermore contribute to the downfall of capitalism. This socialist revolution would, “abolish private ownership of key elements of economy and change nature of relationships from ones based on marriage and property.”

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Smith mentioned that “The division of labour, however, so far as it can be introduced, occasions, in every art, a proportionable increase of the productive powers of labour.” (Smith, p. 110). Such a phenomenon would no doubt result in an increase in productivity due to the specialisation of jobs with increased efficiency in doing work. However, due to the specialisation of jobs, the people in society would then be subjected to job positions with varying levels in wages, which could result in income inequality in the society. Furthermore, Smith added “This separation, too, is generally carried furthest in those countries which enjoy the highest degree of industry and improvement” (Smith, p. 111).

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720 Words | 3 Pages

The division of labor is monumental to the growth of the capitalist economy because of its profound effects on efficiency, work ethics, and worker solidarity. However, certain deficiencies such as alienation of the worker can cause challenges in the work place. Theorist Adam Smith believed that an efficiency work ethic was the key to a prosperous capitalist economy. Smith stated that his theory of labor division focuses on specialization (as cited in

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1719 Words | 7 Pages

Unlike Weber, Karl Marx thought that capitalism is the creation of bureaucrat class for their interests, in order to dominant the foundation of the society. Nevertheless, for Marx religion is a part of the society and it is basic needs for individuals, so in Marxist perspective about religion there is nothing to do with capitalism, but in Weber’s perspective religion is the source of

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Smith says, “as it is by treaty, by barter, and by purchase, that we obtain from one another the greater part of those mutual good offices which we stand in need of, so it is this same tuckering disposition which originally gives occasion to the division of labour,” (Smith 2000:16). Smith shows that people have more wonts and needs that have to be obtained in different ways. The production needs and skill are far to great for one single person to make for themselves. Smith claims that capitalism naturally came out o the need for goods. This need for goods resulted in the increase in specialization and productivity which Smith calls the division of labour.

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1727 Words | 7 Pages

Conflict theory states that tensions and conflicts arise when resources, status, and power are unevenly distributed between groups in society and that these conflicts become the engine for social change. In this context, Marx’s conflict approach was developed in 19th century by Karl Marx (1818-83) .Marx argued wealth and power were unequally distributed in society and sought to explain how one minority group (1% ruling-class) in society maintained its dominance over the majority (working-class). Weber formulated a response to Marx’s theory. Weber saw that conflict didn’t overwhelmingly involve the economy, but that the state and economy together set up conditions for conflict. In this essay I will discuss the views of Conflict Theorists on

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