Adam Smith vs.

Karl Marx

Adam Smith and Karl Marx are the greatest economic analysts the world has
ever seen. Adam Smith is considered as the father of modern day economics
whereas Karl Marx is considered as the the father of Communism.
Adam Smith has taken a Western approach in his thought processing on
economics. Adam Smith had stated that the workers always look for the best
jobs and the best wages. On the hand, Karl Marx was against such a theory.
In his opinion, a labor-wage war will break down the society and lead to the
downfall of the economic composition.
Adam Smith believed in the liberty of all individuals through a capitalistic
approach. On the contrary, Karl Marx was a critic of capitalism and believed
in individual freedom. Karl Marx believed that Socialism would replace
capitalism.
Adam Smith was also an advocate of free market whereas Karl Marx thought
this would make the rich more rich and the poor poorer.
Adam Smith was of the opinion that each person has the right to pursue
happiness and he has to take that in his own hands to advance within the
society. Karl Marx does not agree with this principle. In his opinion, when a
person betters himself, he is not improving but endangering the society.
Adam Smith has published his ideologies in his book, Wealth of Nations, which
was published in 1776. Adam Smith has discussed in detail the principles of
Capitalism in this book. The basic idea of Communism put forth by Karl Marx
came to the light through his book, Communist Manifesto' (1848), which he
co-authored with Frederick Engels.

While Adam Smith was an advocate of small government, Karl Marx was an
advocate of larger government.
Adam Smith was a Scottish economist born in 1723. Karl Marx was a German
political economist born in 1818.
Summary
1. Adam Smith had stated that the workers always look for the best jobs and
the best wages. Karl Marx was of the opinion that a labor- wage war will
break down the society and lead to the downfall of the economic composition.
2. Adam Smith believed in the liberty of all individuals through a capitalistic
approach. On the contrary, Karl believed that Socialism will replace
capitalism.
3. Adam Smith was of the opinion that each person has the right to pursue
happiness and he has to take that in his own hands to advance within the
society. In Karl Marx's opinion, when a person betters himself he is not
improving but endangering the society.
Ideas
Role of the
Government in the
economy
Role of the
Individual

Free Enterprise

Smith

Marx

Laissez- Faire Leave it alone

Government should not interfere
in the economy

Society controls the economy.

Government eventually disappears.

Individualism individuals work for

their own self-interest and when
they do, all of society benefits

Collectivism individuals work for

the collective goals of society to
benefit the common good

Individuals own the means of

production to make a profit.
Individuals answer the questions

No free enterprise. Society owns

the means of productions and
answers the questions of what to

Distribution of
Wealth
Price

of what to produce, how much to

produce etc, based on market
forces
Wealth is distributed unequally

produce, how much etc. based on

the needs of society

Price is set by market forces of

supply, demand and competition.

Price is determined by society

Wealth is distributed equally in

society or according to need

ASSIGNMENT
KARL MARX AND ADAM SMITH COME BACK FROM THE GRAVE. YOU
WILL CREATE A DEBATE BETWEEN THE TWO OF THEM. THE PLAY
MUST REFLECT THE PROS AND CONS OF BOTH MENS ECONOMIC
IDEAS. THE DEBATE SHOULD BE 16 LINES LONG. GRADE WILL BE
DETERMINED ON YOUR ABILITY TO SHOW THAT YOU CAN
DIFFREENTIATE BETWEEN THE PROS AND CONS OF EACH SYSTEM
THEY DEVISED