Carl Marx vs. Adam Smith

Smith's major thesis in the Wealth of Nations was that, except for limited functions (defense, justice, certain public works), the state held back from interfering with the economic life of a nation. Smith did not view kindly the motives of merchants and businessmen. He suggested that businessmen seeking their own interest are led "as if by an invisible hand" to promote the well being of society.

This position is supported in the Wealth of Nations by an analysis of how economic systems function and develop over time. Smith sought to show how competition in the marketplace would lead businessmen to supply the goods consumers want, to produce these goods efficiently, and to c

harge only what they are worth. He saw monopoly, whether private or state-imposed, as the evil to be combated, and competition as promoting the best interests of society. He went on to argued that economic growth, which depends upon capital accumulation and an increased division of labor, would be promoted best by private rather than public efforts; “… though there is little variety in the occupations of the greater part of individuals, there is an almost infinite variety in those of the whole society.” People would save and invest for the future because of the built in desire of individuals to better their own condition. “By pursuing his own interest he frequently promotes that if the society more effectively than when he really intends to promote it.” Finally, he strongly criticized the mercantilist writers of his day, who promoted state intervention in international trade to receive the riches of foreign treasure. Mercantilist thinking was based on the thought that the volume of trade was limited and that countries could expand their trade only at the expense of others. Smith claimed, that mercantilism confused money and wealth, ignoring the fact that the only real purpose of money is to purchase goods. He maintained that "free trade" increased the wealth of nations while restrictions on trade diminished wealth.

This is an example of two revolutionary thinkers that define success in very different manners. Smith basing it on individualism, while Marx put emp

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Smith Marx, Wealth Nations, America Smith, Adam Smith, wealth nations, Carl Marx, utopian dream, communist society, define success,