“The Wealth of Nations” vs.
“The Communist Manifesto”Looking at the beginnings of civilization, one can identify a common theme between almost all prior cities and nations. This theme was and still is that these civilizations were structured and divided according to different powers, no matter it being social, economic, or political power. An example of this can be seen when examining the Feudal system of the Medieval period, when power was held by kings and lords, while peasants had barely if any say in rule. Many have had their say in what they believe to be the “utopian system,” by which nations and states should be run. Their perfect system for economics and society have been based on a wide array of ideas, ranging from Social Darwinism to needs of all human beings. Two individuals who held widely differing political views on their ideas of the “perfect government” were Adam Smith and Karl Marx. Adam Smith has been regarded to be the father of modern economics, and many of his ideas have been integrated in a majority of the nations in the present day world.
His major work was “An Inquiry into the Nature and Causes of the Wealth of Nations,” where he discusses many of his economic views. Smith discovered surprising conclusions during his time, when he applied scientific principles to economic behavior. One of his dramatic conclusions was that people mainly acted out of their own self-interests, and if permitted to follow their own interests it created natural social harmony and economic productivity. This would occur and was led without any conscious control or direction, “as if by an invisible hand.”According to Smith’s “The Wealth of Nations,” he held the belief that a greater division of labor lead to a greater amount of productivity. The more divisions which are created, the faster a product can be created and therefore a greater quantity can be produced in the same relative time. With division of labor, the process of manufacturing is broken up and branched into its very basic parts; instead of creating an entire unit, the worker preforms one or two basic acts.
According to Adam Smith, the size of a particular market limits the divisions and size of a manufacturer. Due to the extra productivity from the divisions in labor, the market must be able to meet the surplus created or the manufacturer will suffer. According to Smith’s economic ideas, a person’s own labor can supply all of their needs. Someone can purchase or command commodities which they need or want, and are created by other people’s labor, according to their own labor, and therefore their earnings. The commodities which they can command, classify them as rich or poor, and are usually of equal value as their labor.In “The Wealth of Nations,” Smith also describes his ideas on supply and demand, which hold true to this day. According to his writings, if a quantity of any commodity which is brought into a market, falls short of consumer demand, then a competition will begin for the purchase of the product and the market price will rise above the natural price. If a quantity of any commodity which is brought into a market, exceeds consumer demand, then the buyers are willing to pay less and the market price will fall below the natural price.
The goal of manufacturers is to provide a quantity of the commodity to equal buyer demand, and therefore the market price will be near the natural price. Smith believed that social progress would result from free trade and a self-regulating economy. He stated that government should have a “hands off” policy when dealing with the economy, because when pursuing a person’s own interest they frequently promote the interest of the entire society, more effectively than the actions of the government.”The Wealth of Nations” was written in 1776. In this period of history there was much political unrest in England, one such reason was because of the American revolution. The primary cause behind the revolution was taxing and tariffs on the part of England. This could be a motive behind Smith’s idea that limited if any government control in the economy would cause economic harmony, opposed to England’s strict control.
“The Communist Manifesto” was a pamphlet written by Karl Marx and Friedrich Engels, and unlike “The Wealth of Nations,” this writing completely opposed the idea of a free market economy and any form of economic competition. The “Communist Manifesto” had a slight impact when it was first published in 1848, but later it became one of the most revolutionary declarations in the world and the basis of Marxism. Karl Marx was a German philosopher and social scientist who was distressed by the Industrial Revolution. Friedrich Engels was a young German radical that joined up with Marx. They both wanted to bring about a political change, to aid the struggle of the working class. “The Communist Manifesto” considers history to be a series of conflicts between the classes, the oppressor and the oppressed. The oppressors, according to Marx and Engel, were the bourgeoisie who were modern capitalists, and the owners of the means of social production and employers of wage-labors. While the oppressed were the proletarians who the modern wage-laborers, who had no means of production on their own, and were reduced to selling their labor power in order to live.
Adam Smith saw the bourgeoisie as fare competitors in the free market, while he viewed the proletarian or working class as exchanging their labor for their needs and wants in the purchase of commodities. While Smith believed that the creation of a free market economy with competition, would lead to economic and social harmony; Marx believed all types of government and economic structures would lead to a revolution on the part of the working class against the ruling middle class. According to Marx and Engel, these revolutions would occur until a classless society with no central government or economic structure were created, where the chief means of production were publicly owned. Marx also held the belief that large cities were bad in nature, because they allowed the bourgeoisie to maintain control and increase capital over the proletarians. The bourgeoisie also constantly expanded their markets over the globe; this allowed them to also exploit people all around the globe, by making them dependent on the bourgeoisie. Smith on the other hand believed this allowed a greater commodity to be sold and bought, and increased the profit margin and therefore benefitted everyone involved. Competition on the part of the bourgeoisie, according to Marx, led to the degradation of honored occupations and also of the family.
“The Communist Manifesto” was written in 1848 on eve of the German revolution, which was also during the height of the Industrial Revolution. Marx and Engel believed that the workers, or proletarians, who labored in factories should revolt against the bourgeoisie, and create a classless society. The Manifesto was specifically written in order to keep enthusiasm and strength behind the German revolution of 1848 which was against the Austrian ruler and Prussian king, because of famine and unemployment that ravaged the area. The revolution later lost momentum and was suppressed, much to the dismay of Marx and Engel. “The Wealth of Nations” by Adam Smith and “The Communist Manifesto” by Karl Marx and Friedrich Engel, both had contradictory ideas on how and how not to setup a government and economic system. They both serve as the basis of two different economic and political systems. When looking at the present day world, one can see that the ideas behind “The Wealth of Nations” serve a greater role in most governments today.Bibliography: