Karl Marx And Karl Polanyi

1668 WordsMar 25, 20177 Pages
Adam Smith, Karl Marx and Karl Polanyi are writer of capitalism, that have influenced capitalism in different ways to making capitalism what it is today. Adam Smith known as the father of the political economy, developed the concept of the invisible hand; which explains how self-interest and competition in a free market economy, would allow economy prosperity. Another concept Smit developed is division of labour which say that jobs a business should be specialised, instead of one person having to carry out all the processes. Karl Marx, on the other hand, demonstrates to us the negative impact of the capitalist system upon workers and society in general. As Marx believed that workers gain nothing, instead get exploited by the capitalist who…show more content…
However, critics of the invisible hand say that it is not as strong as it was in the time of Smith, due to large powerful cooperation, effective marketing system and inefficient financial market blocks the mechanism of the invisible hand which does not allow the scare resources to be used at their best use. An example is of the invisible hand in works is, say if a candle maker sells one candle stick for £1 but, another candle maker sells 3 sets of candles for £2, it would mean he would get all the business making the other candle maker lose out and make even run out of business. So, to compensate the lose the candle marker would be forced lower his prices to survive and not get out of business, therefore, the candle maker is guided by the invisible hand being his self-interest to gain profit to lower his prices. Division of labour another, one of Adam Smith’s concepts explains that productive power of workers would increases each worker would have a specialised job to carry out and in turn would allow increase number of output to be produced. Smith further, says that division of labour is not something that is regulated by an authority, instead it is human nature. As what make us human is our propensity to truck, barter and exchange items, which gives us assurance to be able to trade what we have produced goes on to encourage division of labour. Smith gives 3 reasons as to why division of labour increase’s productivity. First, division
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