Adam Smith The Wealth Of Nations

673 Words3 Pages
Since the economic recession of 2008, sometimes called “the Great Recession”, the future of capitalism has become an ever present question in business, economics and politics. The focus of many of these questions has been drawn from the issue of wealth distribution, and especially the rapidly expanding inequality gap in many of the leading capitalist economies. Numerous studies, books and even grassroots political movements have come out to attempt to address the issue, ranging from the Occupy Wall Street protests in New York to the surprising success of Capital in the Twenty-First Century by Thomas Piketty. The protests against inequality have led to concerns over the future of the capitalist system, as a capitalist economy inherently cannot…show more content…
Adam Smith’s book The Wealth of Nations is widely considered to be the birth of capitalism, and prior to this, states primarily were mercantilist. Unlike capitalism, mercantilism did not create wealth, but instead was structured around “the view that maximising net exports is the best route to national prosperity” , meaning that the state would focus on exporting and attempt to avoid imports. Mercantilism would be replaced by capitalism in the late eighteenth century, with the publishing of Smith’s The Wealth of Nations. Smith’s book, and especially the notion of “the invisible hand” is seen as the birth of “what is known as classical economics” and capitalism and is the foundation for the free market economy. At the heart of Smith’s view was a “laissez-faire attitude by government toward the marketplace will allow the “invisible hand” to guide everyone in their economic endeavors, create the greatest good for the greatest number of people, and generate economic growth.” Karl Marx would come to criticize the capitalist system, suggesting that it benefitted the wealthy, what he called the bourgeoisie, while harmed the working class, the proletariat. Marx’s view that capitalism was inherently exploitative, and he believed that, over time, the inequality of the capitalist system would intensify and eventually would destroy itself. “Marx predicted the fall of capitalism and movement of society toward communism, in which “the people” (that is, the workers) own the means of production and thus have no need to exploit labor for profit”. Throughout much of the twentieth century, the teachings of Marx were loosely used by numerous countries, most notably the Soviet Union and China. Many of Marx’s theories have been discredited since, mainly due to the failure of communist economies and the rise of wages for workers in capitalist nations. The collapse of the Soviet Union at the end of the
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