Labour Power : The Work Of Adam Smith And Karl Marx

Division of labour is also credited with the rise of trade between different areas, the rise of capitalism, and increasingly complex manufacturing and industrialization. For Karl Marx, the production portion of Capitalism signalled great trouble. He believed production in Capitalist society worked in a way that the rich factory owner benefited and the poor factory workers lost. In his manner of reasoning, the Capitalist system was inherently meant to benefit the rich and exploit the poor: “All the bourgeois economists are aware of is that production can be carried on better under the modern police than on the principle of might makes right. They forget only that this principle is also a legal relation, and that the right of the stronger prevails in their ‘constitutional republics’ as well, only in another form.”[ii] Marx’s view of society and the world lead him to believe that humans create change in their lives and in their environment through practical activity in the practical world.

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

Marx's theory on Capitalist exploitation is an incredibly deep theory, but to explain it in a nutshell, it is that the working-class people are improperly compensated for their work. The rich, the higher-ups, they continue to expand their wealth by exploiting the working class, the Capitalist system not only allows but effectively demands that Capitalists increase their wealth, long-term or short-term, whether at the cost of the working-class or not. There are three “values” to take into consideration, the use-value, the exchange-value and the

Designed over two hundred years ago, Karl Marx’s philosophy defines specific characteristics known today as the Marxist approach. In this critical approach, whomever holds the power and controls the factories or means of production, consequently controls the whole society. Marx’s opinion states that the laborers running the factories and thus holding the means of production should be the ones holding the power. However, this idea rarely holds true in practical society. Frequently, Marx notes, powerful people hire others to carry out the labor. This division of power reflects current culture. Two main classes or categories of people exist, the bourgeoisie and proletariat. The bourgeoisie is the powerful, or those who are in charge of

Marx points out that the means of production are owned by only a small group of the population and most other people do not. These people who don't own the means of production (land, machinery, factories, tools, etc..) are called the proletariat and cannot sell their produce, only their labour-power... that is, they can sell hours of their time to other people. So the profits of their labour always go to those who hire them, and they are left with only a bare minimum wage.

The Industrial Revolution (1750-1850) had brought about significant changes in agriculture, mining, manufacturing, transportation and technology and subsequently established an era of unprecedented economic growth in capitalist economies. It was within this era that Karl Marx had observed the deprivation and inequality experienced by men of the proletariat, the working class, who had laboured excessively for hours under inhumane conditions to earn a minimum wage while the bourgeoisie, the capitalist class, reaped the benefits. For Marx it was this fundamental inequality within the social and economic hierarchy that had enabled capitalist societies to function. While Marx’s theories, in many instances have been falsified and predictions

To begin, Marx claims that labor power is a special commodity that describes the physical and mental abilities found within human beings (Marx, page 270). Humans have this unique ability to transform natural materials into commodities through their own power. This is why individuals must be “free” in multiple senses in order to sell their labor as a commodity.

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

Another concept that brought about inequality among the bourgeoisie and proletariat is the labour theory of value. As stated in the textbook Classical and Contemporary Sociological Theory, “One of the basic truths of capitalism is that it takes money to make money, and the more money a business owner has at his or her disposal, the more ability the business owner has to generate profit-making schemes” (Appelrouth and Edles: 25). In this case, the bourgeoisies are at a benefit as they own the means of production, while the proletariat are at a disadvantage as they don’t have capital to make money. Marx’s ‘general formula for capital’ explains the class and power relations that predominate in modern capitalist society through the formula M-C-M. Marx describes this law of value to be beneficial to the bourgeoisies as they increase profits and capital. Bourgeoisies are able to do this because they have the money (M) to buy capital, which converts their money into commonality (C), which they then use to produce other commodities that are sold for money (M). Bourgeoisies predominate the proletariats through power relations as the formula is inversed for the working class, C-M-C. The working class sells their labour through commodity (C), which then is exchanged for money (M) and used to buy commodities (C) necessary for survival. The C-M-C

Labor for Marx reduces man to a means of production. As a means of production

At its very core, Marx’s capitalist theory is an economic system based on three things: wage labour, which comes from land owners employing individuals to work for a wage, control of the means of production (factories, farms, offices and machinery), and production for exchange and profit. Considering the majority of society do not own the means of production, and are not private owners, they are forced to offer their ability to work in exchange for a regular wage,

In regards to the labour-capital relation within a traditional capitalist corporation Marx & Engels (2007) refer to the dialectic between the capitalists (or bourgeoisie) who own the property and the means of production and the laborers (or proletariat) who own no property and are obligated to sell their labour to the bourgeoisie to gain substance. For Marx & Engels, this labour market is inherently fraught with tension, since the interests of the capitalist and labourers are diametrically opposed, and the balance of power between capitalists and labourers tips further in the favour of the capitalists. Because workers have nothing to sell but their labour, the bourgeoisie are able to exploit them by paying them less than the true value created by their labour. Furthermore, because of the unequal positions of capitalist and labourer, labourers must work for someone else- they must do work imposed on them as a means of satisfying the needs of others. As a result, labourers inevitably experience alienation which Marx’s Economic and Philosophic Manuscripts (1844) summarizes as the separation of individuals from the objects they create, which in turn results in one’s separation from other people, from oneself, and ultimately from one’s human nature.

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.

The need for a second, less class of citizenry to work is essential and they are referred to by Marx as the labour, Proletariats, or the working class. The working class exists to run the means of production, and they must sell their labour-power to the owning class in order to sustain themselves. Their skills are their only true ‘value’ in the alienated minds of the capitalists. The worker is limited with what they have to offer the capitalist and that is themselves and their individual skills as a commodity.

Not only is the worker alienated from his labour, but he is also separated from the result of his labour - the product. This is the most obvious manifestation of the alienation of the worker; he has no power over what he produces. The wage contract ensures that the products of labour are surrendered to the capitalist, who then sells them on the market, and pays the worker a wage. Marx points out that the alienation of the product is double - not only is the worker separate from his own product, but that product, as increasing the power of capital, actually weakens the worker's position. (4) Marx refers to the product of labour as 'the objectification of labour'. The worker's labour objectified is used against him in a capitalist