Marxism vs Classical Economics, Essay Example

Karl Marx is a standout amongst the most dubious figures of the 20th century, despite the fact that he existed in the nineteenth, his legacy has been on as one of significant debate and controversy. As one of the first personalities behind communism and a fundamental progressive and revolutionary, he is eminent as a radical and to a degree dangerous political thinker. Meanwhile, Adam Smith is the father of making economics a science. As a part of the school of classic economic thought, Smith intertwined economics with moral theory in regards to the way people should live, states Michael Schluter. Smith’s clarifications of market strengths and the role of the state in financial matters have molded our industrialist monetary framework today. These men have together been put in the school of classic economics, showing that there is an overlap in their philosophy as stated by Louis Kelso. Politically, be that as it may, these men vary incredibly.

Over the years, economic philosophers have contended different theories, trying to discover the type of economic thought that will propagate the most proficient and lucrative economy over the Marxist school of thought (Smith, 2010). One renowned and challenged school of thought is Classical Economics. The school of Classical Economics has been known as the “first modern school of economic thought.” One of the most celebrated economists of this sort is Adam Smith. Some likewise put political-economist Karl Marx in the organization of established economists such as Malthus and Ricardo. Both proponents of capitalism, Malthus and Ricardo both disagreed on a number of different fronts regarding how the system should operate. Regardless, they both agreed on one thing – overpopulation would decrease the efficacy of capitalism, and subsistence was a key tool in combating this phenomenon. This train of thought shows the transition that existed during this time until Marx finally made the swift and final blow to an outright rejection of Capitalism, disagreeing with everything it stands for. Capitalism and Marxism are perfect inverses in the political-economic range, advocates of capitalism and communism individually. In spite of their political contrasts, they share a few characteristics.

Karl Marx was deeply troubled by the production aspect of Capitalism. He had a belief that production in Capitalist society worked in a manner that the rich owners and managers of factories profited off of the poor workers, who had no benefit whatsoever. In his way of thinking, the Capitalist framework was naturally intended to profit the rich and exploit poor people.

Karl Marx and Adam Smith separated from each other’s political stance. Smith composed The Wealth of Nations in the late 1700s, amid which a mercantilist society still existed. He understood the requirement for a superior and more effective economy that would profit every national and the whole country in the meantime. An arrangement of free trade was the most evident response to this on the grounds that it permitted each citizen the chance to claim his or her own particular property and find a profession in the way he or she saw fit. On the off chance that the individual was disappointed with the decision he or she made, a free trade society permitted the opportunity and capacity to move from one occupation to the next without restraint. The issue here is that he envisioned this system, but did not live it and that is how he and Marx varied. Marx experienced late 19th century, when the industrial revolution was in effect. He actually saw and had issue with the difficult and dehumanizing conditions in which British assembly line laborers worked. It is truly no big surprise that Marx thought capitalism was the source everything wrong with society. He was merely exposed to laborers who worked extend hours for a small income while rich manufacturing factory owners made significant profits.

Notwithstanding his geological and historical background, there are two key reasons concerning why Marx despised capitalism for all the issues in society according to YousufDhamee, which likewise embody his schism from capitalistic proponents like Smith: 1) He stated that the class in which an individual is conceived is the one in which he or she will remain. Smith accuses Marx of blaming capitalism for the thing it looks to change. Smith argues that the excellence of an capitalistic framework is that it is free—we can claim property, begin a business, and live our lives as we so choose, so long as no one else is harmed (Baumol, 2007). 2) Marx could not anticipate the end of horrendous working conditions (generally) because of government labor unions. There are two solutions that Smith would have proposed individuals in poor working conditions to be introduced to being 1) quit 2) change it. In Marx’s experience, production lines were placed in small residential areas, meaning many workers only means of transportation was to walk to their place of work, and frequently worked in a place that was closest to their home. In the event that he or she quit the occupation, he or she would not work whatsoever according to Marx (Baumol, 2007). Quitting was not a viable option. As such, Marx saw working in a factory as dehumanizing and coercive.

Marx created a political-economic approach that demonstrated an alternate side to the production of items and market exchange compared to that of neoclassical financial aspects. In the meantime as capitalism had extraordinary potential, it made conditions that were abusive and exploitative for most of the populace according to Marxist theory. However the very expansion of capitalism produces an average workers or working class that would have the capacity to oust capitalists and the capitalistic system as a whole and start making a more humane economic framework (Smith, 2010). Marx created a model in which an explanation could be given to clarify these powers and the disagreements inside capitalism so that such measures would not be necessary.Albeit different in terms of what system is more effective, both schools of thought agree with one thing – the political grounding in place has a significant effect on how effective an economic model will be.

References

Baumol , William J, et al (2007) Good Capitalism, Bad Capitalism, and the Economics Growth and Prosperity (London: Yale University Press), pp 60-92.

Dhamee, Yousuf. “Adam Smith’s Laissez-Faire Policies.” The Victorian Web. http://www.victorianweb.org/economics/laissez.html

Dhamee, Yousuf. “Adam Smith and the Division of Labor.” The Victorian Web. http://www.victorianweb.org/economics/division.html

Kelso, Louis O. “Karl Marx: The Almost Capitalist.” Center for Economic and Social Justice. http://www.cesj.org/thirdway/almostcapitalist.htm

Mahashvarananda, Dada. “Global Capitalism’s Four Fatal Flaws.” Prout Globe. http://proutglobe.org/2012/10/global-capitalisms-four-fatal-flaws/

Schluter, Michael. “Is Capitalism Morally Bankrupt.” The Jubilee Centre. http://www.jubilee-centre.org/is-capitalism-morally-bankrupt-five-moral-flaws-and-their-social-consequences-by-michael-schluter/

Smith, Richard (2010) “Beyond growth or beyond capitalism?”, Real World Economics Review, 53, p 35

Younkins, Edward (2006) Adam Smith’s Moral and Economic System. (Wheeling Jesuit University, 2006)

Young, Jeffrey T. (1997) Economics as a Moral Science. UK: Edward Elgar