Comparing Marx And Hayek's Views On Capitalism

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

“to a mere money relation,” (Marx and Engels [1848] 2013:35]. Marx, saw the tear down of the old as the only way for the bourgeoisie to survive. Periodically, a crisis occurred where productive forces threatened their conditions and bourgeoisie would have to bring in new productive forces and destroy the old. Marx believed that these changes to technology and productive capacity were the main influence on how society and the economy were organized. The bourgeoisie had to push for the modern world to quickly and continually develop to protect capitalists’ monopolies. However, constant development caused continual disturbances of social conditions by breaking down stable aspects of human life. Capitalist used their power to push the world to advance so that they could prosper with no concerns to the possible effects on the economy, which would have been most detrimental to the proletariat. For Marx, this showed that capitalists’ self-interest pushed economic progress, which led to societal progress but also risked crisis. Capitalism not only affected society through the creation and separation of social classes but also in influencing societal progress and social relations.

For example, it shapes the nature of religion, law, education, the state and so on. According to Marx, capitalism sows the seeds of its own destruction. For example, by polarising the classes, bringing the proletariat together in ever-increasing numbers, and driving down their wages, capitalism creates the conditions under which the working class can develop a consciousness (or awareness) of its own economic and political interests in opposition to those of its exploiters. As a result, the proletariat moves from merely being a class-in-itself (whose members share the same economic position) to becoming a class-foritself, whose members are class conscious – aware of the need to overthrow capitalism. The means of production would then be put in the hands of the state and run in the interests of everyone, not just of the bourgeoisie. A new type of society – socialism developing into communism – would be created, which would be without exploitation, without classes and without class conflict. Marx’s work has been subjected to a number of criticisms. First, Marx’s predictions have not come true. Far from society becoming polarised and the working class becoming poorer, almost everyone in western societies enjoys a far higher standard of living than ever before. The collapse of so-called ‘communist’ regimes like the former Soviet Union, and growing private ownership and capitalist growth in China, cast some doubt on the viability of the practical implementation

The Communist Manifesto left a tremendous impact on a society that was rapidly becoming industrialized, and its effects can even be seen on the dominating economic system of the twenty-first century. In the later nineteenth century, however, industrial capitalism was on the brink of ruin. “On many occasions during the past century, Marxists have thought that capitalism was down for the count . . . Yet it has always come back with renewed strength.” Industrial capitalism succeeded in the face of communism, despite numerous economic disasters. As the capitalist economists hopefully noted at the time, these economic earthquakes, temporary in character, soon cured themselves and left capitalism unscathed. Karl Marx sought to create

Marx's ideas on labor value are very much alive for many organizations working for social change. In addition, it is apparent that the gap between the rich and poor is widening on a consistent basis. According to Marx, the course of human history takes a very specific form which is class struggle. The engine of change in history is class opposition. Historical epochs are defined by the relationship between different classes at different points in time. It is this model that Marx fleshes out in his account of feudalism's passing in favor of bourgeois capitalism and his prognostication of bourgeois capitalism's passing in favor of proletarian rule. These changes are not the reliant results of random social, economic, and political events; each follows the other in predictable succession. Marx responds to a lot of criticism from an imagined bourgeois interlocutor. He considers the charge that by wishing to abolish private property, the communist is destroying the "ground work of all personal freedom, activity, and independence". Marx responds by saying that wage labor does not properly create any property for the laborer. It only creates capital, a property which works only to augment the exploitation of the worker. This property, this capital, is based on class antagonism. Having linked private property to class hostility, Marx

Bertrand Russell once expressed that “advocates of capitalism are very apt to appeal to the sacred principles of liberty, which are embodied in one maxim: The fortunate must not be restrained in the exercise of tyranny over the unfortunate” (Russell). Even in a relatively capitalist society, there are always criticism regarding the capitalism and its disregard for “the unfortunate” and the tyranny the “fortunate” exert over. The foremost proponent of this antagonism would be Karl Marx, who claimed that capitalism is ultimately hurtling toward its downfall.

In Capital, Marx is concerned with the cycle that Capitalism presents. The pattern of hiring labor power to extract surplus value then lowering the exchange-value of the commodities is striking to him. It seems counterintuitive for a Capitalist, whose goal is to maximize profits, to continually lower the value of their product and decrease their profits over time. Marx also highlights four detrimental consequences that occur as a result of this pattern. All of these consequences are the basis for his criticism of Capitalism.

In a time of such economic distress, where it sometimes feels as though the world as we know it is coming to an end, it is hard not to examine and question the fundamental idea of capitalism. Many people are starting to wonder if our laissez-faire attitude towards the economy can continue to be successful or if a major change to our society is imminent. In seeking answers to these questions, it is impossible not to think of economist Karl Marx, who spent the better part of his career analyzing capitalism. Marx long ago predicted what he deemed the inevitable downfall of the capitalist society and outlined his reasoning in his infamous Manifesto of the Communist Party. According to Marx, capitalism is bound to collapse due to its inherent

Emerging, as Marx posits, “out of the economic structure of feudal society,” Capitalism quickly became a pervasive, relentless and seemingly inescapable structure. “The emancipation from serfdom and from the fetters of the guild” led, on one hand, to the unprecedented creation of various economic and social opportunities. Conversely, Marx also acknowledges that “these new freedmen became sellers of themselves only after they had been robbed of all their own means of production, and of all the guarantees of existence afforded by the old feudal system…Just as man is governed, in religion, by the products of his own brain, so, in capitalist production, he is governed by the products of his own hand…within the capitalist system all methods for raising the social productiveness of labor are brought about at the cost of the individual laborer; all means for the development of production transform themselves into means of domination over, and exploitation of, the producers; they mutilate the laborer into a fragment of a man, degrade him to the level of an appendage of a machine…they transform his lifetime into working-time, and drag his wife and child beneath the wheels of the Juggernaut of capital… Accumulation of wealth is at one pole, therefore, at the same time accumulation of misery, agony of toil slaver, ignorance, brutality, mental degradation, at the opposite pole, i.e., one the side of the class that produces its own product in the form of capital.” Throughout the first

Capitalism is “a system of economic enterprise based on market exchange” (Giddens, 2009). Almost all industrial societies today are capitalistic in nature since their economic structures are based on free enterprise and market competition. However, capitalism first became the dominant mode of production over two centuries ago in Western society. Over this period, there have been some major theorists who have attempted to analyse capitalism and among these theorists are Karl Marx and Max Weber. Notwithstanding the obvious differences between Marx and Weber’s approach to capitalism, particularly with regards to the content of their analyses, their appraisal of capitalism is attached to a critical position (Craib, 1997). Both Marx and Weber agreed on the uniqueness of capitalism as an economic system. A system where: relations of production were concentrated in the hands of a rather small sector of the population; labour was performed by the masses of workers selling their services on a market; efficiency became a priority through which rationality and technological advancement were applied over religious and traditional values; and the critical goal at the end of economic behaviour was unrestricted wealth acquisition i.e. maximum profit (Birnbaum, 1953). It could not simply be simply treated as just a new economic system but a revolutionary mode of production which involved a new type of society.

Capitalism was believed to be the answer to achieve an ideal society. Necessary for means to grow as a society, a community, a population. This system was utilized to create technological advancements, build networking, ensure equal rights for all owners, and improve the quality life. This was deemed to be done through competition. Competition that consisted of individuals striving to be better than the other. This left individuals with no choice but to compete with their neighbors, friends, and family. Capitalism was supposedly believed to be virtuous for all, bringing the individual closer to self actualization. However, as Karl Marx predicted, this system was, and still is, too good to be true. Frederick Engels analyzed Marx’s work and

The definition of Capitalism at its core the foundation of Western economics and politics. It is more than a concept that is driven by a way of life for many but yet it is such a foul word in the eyes of Carl Marx. His analysis is that such an idea has the power to drive individuals to betray their core beliefs and committing acts that are as severe as one of the reviled families in history, the Bourgeois; The literary piece known as, Bourgeois and Proletarians. In this paper will be an analysis of Carl Marx’s writing and to evaluate if Marx presents a compelling argument that presents a valid point of capitalism akin to the bourgeois.

Marx’s idea of the genesis of capitalism is rooted in his theory of historical materialism. Historical materialism is the “materialistic interpretation of history” and is based on the concept of dialectical materialism. He regarded that evolution is the result of economic forces alone, which is why the fundamental activity of man is “social production”. Since, no man can produce in isolation, man needs to enter into definite political and social relationships in each mode of production.

As the world continues to go through changes, we observe that there are many patterns in history that continue to repeat over and over again. We constantly question the state of the world and what our past has currently let us to. How did our ideas become about? What has influenced our patterns of thought? How do our interactions amongst others in society differentiate with our relations in the past? When observing the current state of the world, it is quite easy to come to the conclusion that society is nothing like it used to be. However, when you are looking at the structure of our capitalistic society the world remains the same. Literature and theories of Emile Durkheim, Max Weber, and Karl Marx, the three classical social theorists,

The writings of Karl Marx (1818-83), according to Mingst (1999), are fundamental to the Marxist school of thought, even though he did not directly state all the issues that are today encompassed by Marxism. The theory of Marx on the evolution of capitalism based on economic change and class conflict: the capitalism of nineteenth century