SMITH AND MARX

Capitalism of Smith and Communism of Marx

Capitalism of Smith and Communism of Marx

Introduction

During the past few centuries, many economic systems arrived and deteriorated. Adam Smith and Karl Marx who are best known for the 2 economic systems thought that this would revolutionize the economy and it did in a way. To this day, capitalism and communism still stands as the 2 leading economic systems countries use. Both have their ups and downs but these two variations of economy helped shaped this world in their own ways.

Understanding Adam Smith

Adam Smith gives his opinion on the commodity system and its shortcomings, as he dissected, clarified, and the revolution mercantilism economics and advocates of classical economics. Smith disagrees with the state regulation of economic activity in the interests of commercial classes. He suggested that a free and competitive market, which through the "invisible hand" will do better in the management of the economy than mercantilists.

He stressed the invisible hand: Everyone ... In general, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. Preferring to support domestic industry of the foreign, he intends only his own security, and by directing that industry in such areas as their products may be the greatest value, he intends only his own gain, and he is in this as in many other cases, led with an invisible hand to promote the end of which was not his intention. Also, do not always worse for society that it is not part of it (Weber, 1958, p. 17).

A system in which the invisible hand often is assumed that the work on the free market. Adam Smith assumed that consumers choose the lowest price, and that entrepreneurs choose for high profits. He argued that by doing so their excess or insufficient demand known through market prices, consumers are "directed" investment money entrepreneurs to the most profitable industry. Remember that this industry produces goods most highly valued by consumers, so that the overall economic well-being increases.

One very positive aspect of the market economy is that it makes people think about what other people want. Smith saw this as a big part of what was good about the invisible hand mechanism. He identified two ways to obtain assistance and cooperation of others on which we all depend on time. The first way is to appeal to the benevolence and goodwill of others. For this, one must often act in slavish and servile way, which Smith found repulsive, and he asserted that usually occurs with very limited success. The second way is to appeal, and not on other people's own interests (Vickers, 1990, 21).

For Smith, the exchange offer is an attempt to show others that you can do or what you have, it may be useful to others. In carrying out the exchange, it means that the other person acknowledges that what you can do, or what is that you matter. That's why so many people self-esteem is related to their work - well-paid work should ...