A comparison of the economic concepts of adam smith and karl marx

In The Wealth of NationsSmith argued that the most important characteristic of a market economy was that it permitted a rapid growth in productive abilities. Smith claimed that a growing market stimulated a greater " division of labor " i.

A comparison of the economic concepts of adam smith and karl marx

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There are several ideologies of Marx and Smith that have similar background and scope but at the same time there are others which contrast drastically from each other.

The beginnings of both their ideologies and thoughts were based on Classical Economics but somewhere along the way great division and differences occurred.

A comparison of the economic concepts of adam smith and karl marx

Although their political thoughts differed, there was a lot of agreement and similarity between their economic thoughts. Both strongly advocated the labor theory of value which is that the more number of hours put into the creation of an object, the more worthy it becomes.

A Comparison between Adam Smith and Karl Marx. By Sulaiman Sameer * - Iraqi Economists Network

Although this was strongly refuted later on, it left quite a large impact in the understanding of products and their value. Without expanding markets, there would be no profits and people would be out of jobs.

Kal Marx strongly believed that in any capitalist setting, it was always the rich who benefitted from any production while the poor were exploited. Smith, on the other hand, realized that a free trade economy was the secret to success and productivity of a society.

The differences between the political ideologies of both men can be largely attributed to the situations that they encountered in their lives. He commended the independence that the system allowed to start a business or take any decision to become successful regardless of their class or background.

Smith lived in a world that was run by the Mercantilist system which seemed clearly flawed to him.

A comparison of the economic concepts of adam smith and karl marx

As opposed to Mercantilism, Capitalism allowed people to live freely and spend and earn as they liked. He argued that competition and outside factors would always stabilize prices.

He believed that people would strive harder and work more peacefully knowing that there was a return for their hard work. He felt that compromising a system to give an upper hand to the less privileged would be unfair.

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In my opinion, both wanted the best for their societies i. However, the means that each chose to achieve prosperity and success were different and justifiable because of the situation that they had witnessed in their lives.

Marx believed that controlled distribution wealth would ensure this objective whereas Smith disagreed. It is astounding how much the current understanding of economy has benefitted from these individuals.

On the other hand, the laws of Demand and Supply and the concept of the invisible hand are still of considerable value and importance to this day throughout the world.The comparison between Karl Marx and Adam Smith is interesting because each man has been placed in the classical school of economic thought, but the former is a champion of communism and the latter a champion of capitalism.

Three Economists and Their Theories The three most important economists were Adam Smith, Karl Marx, and John Maynard Keynes (pronounced canes). Each was a highly original thinker who developed economic theories that were put into practice and affected the world's economies for generations.

Essay Capitalism: Karl Marx vs Adam Smith.

Marxian economics - Wikipedia

Marx v. Smith on Capitalism Capitalism, according to the Encyclopaedia Britannica, is “the means in which production are privately owned and production is guided and income is disputed largely through the operation of markets”. Adam Smith and Karl Marx Modern political economic theory and philosophy can be greatly attributed to the works of two men who seemingly held polar opposite views on the subject.

Feb 21,  · Compare and contrast the economic theories of Adam Smith, David Ricardo, and Karl Marx? all i need is a few basic points on the compare and contrast on the three people so i can write an essay. Source(s): compare contrast economic theories adam smith david ricardo karl marx: barnweddingvt.com: Resolved.

VIII: Adam Smith vs. Karl Marx: Similarities and Differences Both Smith and Marx held several similar economic views, but differed drastically with respect to political ideology. Both believed that labor assigns value to objects and they agreed on the importance of consumption as it gives rise to production.

Economics: Adam Smith Vs Karl Marx