Adam Smith Or Karl Marx: The Collapse Of The Canadian Economy

Contemporary economics are best explained by comparing two foundational thinkers that have contributed to the better understanding of liberalism, one being its proponent Adam Smith and the other being its most significant critic, Karl Marx. Both thinkers are profoundly important in locating and investigating the roots of neoliberalism as well as exploring alternatives ways to challenge neoliberal economics in the face of its post-cold war expansion as the inevitable and only alternative to redistribution and economic justice. This essay traces the emerging ideas of classical liberalism as articulated by Smith and their subsequent deployment in the debates that produced neoliberalism. In this context, Marx and Marxism are utilized to expose and deconstruct the shortcomings of both liberalism and neoliberalism and their limits in providing solutions to the structural symptoms of liberal and neoliberal capitalism.

A nation is just a vast establishment, where the labour of each, however diverse in character, adds to the wealth of all. Two brilliant people of their time are both respected in their views for creating a near perfect society where everyone is happy. Adam Smith, a respected Scottish political economist philosopher born in 1723, had the goal of perfect liberty for all individuals through the capitalistic approach. While Karl Marx, born in 1818, believed in individual freedom for society and intellectually criticized capitalism giving reasons as to why it was irrational and why it would fail. Adam Smith’s very first sentence claims that, "The greatest improvement in the productive powers

Karl Marx and Adam Smith wrote in the same time period – during the industrial revolution, where the bourgeois had risen to power by oppressing and exploiting the proletariat. The term bourgeois refers to the people in the class of modern capitalists, owners of the means of social production and employers of wage labor. The proletarians are the people in the class of modern wage laborers who, having no means of production of their own, are reduced to selling their labor power in order to live. While Smith, in his Wealth of Nations, wrote in favor of capitalism, Marx, in his Communist Manifesto, was a harsh critic of the system and declared its inevitable destruction and consequent rise of the working class.

Modern economic society can be described as a combination of certain points from several theories combined into one. Changing dynamics and economic needs of nations has spawned a development of various, and contrasting, economic systems throughout the world. Perhaps the two most contrasting philosophies seen in existence today are that of capitalism and communism. The two philosophers most notably recognized for their views on these economic systems are Adam Smith and Karl Marx. This paper will identify several fundamental aspects of economic philosophy as described by Smith and Marx, and will compare and contrast the views of these

Adam Smith and Karl Marx both came from very different worlds, however they saw the world in similar ways. Both had thoughts derived from different views. Smith had a very capitalistic view on things, while Marx was socialist in many ways. They expressed their thoughts in ways that were surprisingly similar while other ideas were dissimilar. Ultimately socialism and capitalism can go hand in hand. One main idea that both works addressed was the productivity of work and the ability to accumulate property, stock and capital. They both wanted a wealthy nation but Marx believed that redistribution of wealth was the way to go. Smith believed in a free economic system that gave capitalists rights to accumulate their wealth.

Marx thought of capitalism in a pessimistic way, he saw the relationship between the employee and employer in a capitalistic society as toxic. To Marx, in a capitalistic society the employee would always be at a constant struggle for power be never endlessly repressed by the bourgeoisie. The employer would pay employees only what they needed to survive making it impossible to move up in class or society. He also recognized that in capitalism everything becomes corporatized. Things like marriage go from a sacred bond between two individuals that once never included money or the government, to something that is regulated by the national government and must be done through the federal court and include ties between the individual's financial status. Small businesses would also become corporatized, a local family doctor has now become part of a larger practice that brings in complex forms of payment such as insurance instead of simply paying a small family doctor directly. He also goes into the downfall of capitalism. The way capitalism works is through a series of economic highs and lows, each high is marked by prosperous times, high employment rate, and overall happiness. But the lows are marked by deterioration of the national economy, low employment rates, and struggle for all classes. To Marx’s these highs and lows are what's killing capitalism with each low being worse than the last until the people revolt and create a new form of government. The next would be socialism and once this fell like capitalism, the new governing system would be communism. Communism is an ideal system where people are never struggling for money and are paid based on their needs rather than their particular job. Through this system a

Canada’s economy is one that exhibits a multitude of characteristics that adhere to the capitalist and socialist constructs of a mixed system. In order to clearly define and analyze the current economic system of the country, one would have to establish a relationship between its economy as well as the ideas, theories, and models of prominent economists from the past. Both Adam Smith and Karl Marx conceptualized contrasting schools of thought regarding the methods in which an economy should be run — Smith emphasized the independence of businesses whereas Marx strived to eliminate class conflict. However, the principles of Marxism certainly satisfy the criteria of Canada’s economy through its regulations, public sector, and market intervention. This widespread manifestation of Marxism within the Canadian economy accurately represents the country’s economic position.

Adam Smith is a proponent of capitalism, more specifically, laissez faire economic. Laissez faire is an economic policy in which businesses operate in the free market with little to no regulation from the government in a free market. Smith would disagree with Karl Marx because the two have different idea when it comes to economics. Smith argues that capitalism is the best form of economics because human self interest drives positive results in the economy. In addition, Smith would argue that invisible hand of the marketplace would help control the economy through supply and demand. When the supply is greater than the demand, the price of the product would be lower than the standard price. The opposite is that when supply is lower than the demand, the price would be above the standard price. With this, Smith believes that laissez faire would be the ideal economic plan. Furthermore, Smith would also argue that competition would lead to better product for the people as competition forces businesses to compete with each other for customers, leading to innovations and better products.

In Smith's government, banking would be regulated and the government would provide public goods, such as highways, canals, lights and sewage systems. All of which would contribute to the public hygiene and overall maintenance of the state, and cities. It is safe to say that Adam Smith would, in today's world, be labeled as a socialist, with his heavy reliance on government funded aid and services.

From a political point of view, Smith wrote that Government intervention should be kept to a minimum within society. From a mercantilist point of view this was a terrible suggestion, however Smith argued that government intervention in markets will cause a limitation in productivity, and therefore not maximise efficiency. However if left alone as discussed in the previous paragraph, each party will seek to maximise its own prosperity within the given constraints, in turn maximising the

There is perhaps not a more famous ongoing dialectic argument in the field of political economy than the one between Adam Smith and Karl Marx in regards to capitalism. The two thinkers, although coming to radically different conclusions about the outcomes of the capitalist system for all parties involved, agree on a surprising number of ideas such as labor being the source of commodities’ value, as well as the fact that the division of labor increases productivity. However, their different conceptions of what determines the price of a commodity, the driving force behind and the effects of the division of labor, and the purpose of the capitalist system have widespread implications that cause their holistic arguments to diverge considerably.

We didn't quite avoid the environmental destruction but that was because governments and markets failed to understand the problem alike. We also saw that when those followers of Adam Smith who believe that markets self-organize towards stability got the upper hand politically, and started to remove the constraints, markets actually became more volatile and unstable, and social destruction, poverty, ill-health, crime and resentment increased. And environmental destruction accelerated. So today, I think we should see Marx as the champion of the view that capitalist market dynamics can lead to unplanned malign outcomes. My general feeling is that Smith would have agreed with Marx about most things. Although we tend to remember him as an economist, Smith was primarily a moral philosopher.

Marangos also further explains that the state is a monopoly of legitimate forces which puts restriction on individual action, despite it correlating to the free market. Consider the financial real-estate crisis in 2008, both had dramatic consequences. Arguably, this could have been due to the limited influence of the government and the want of achieve profits quickly but paying back the lender slowly and with added interest rates. (Gerald Hanks: 2014) This unfortunately caused devasty to millions of people homeless as they were unable to pay the price later given to them after being promised a low interest rate and a lengthier process of paying the banks back. Despite John Stuart Mill claiming that the ‘individual is sovereign’ recklessness and greed of more money can cause government intervention limiting personal freedom. (J.S. Mill: 1991: 14)

Karl Marx held many titles in the 1800s and still holds them in present day. One of his most “popular” titles was “Humanist” among the rest, because it tied all of his titles together. Marx was an idealist, he wanted to make everything simple and equal for everyone. If Karl Marx came back alive today and observed our functioning government and economy, he would find that we are/ will continue to fall as a nation, if we continue to live a capitalist system, because of our federal budgeting, our current debt, wealth/income inequality, labor unions and other factors.

Adam Smith is considered as one of the most influential economists in the 18th century. Although his theories have been criticized by several socialist economists, however, his idea of capitalism still has great impact to the rest of the economists during classical, neo classical periods and the structure of today’s economy. Even the former Prime Minister of Britain, Margaret Thatcher had praised on Smith’s contribution on today’s capitalism market. She commented “Adam Smith, in fact, heralded the end of the strait-jacket of feudalism and released all the innate energy of private initiative and enterprise which enable wealth to be created on a scale never before contemplated” (Copley and Sutherland 1995, 2). Smith is also being recognized