Essay about Adam Smith and Karl Mark Contrasting Views...

The theory of capitalism describes the essential features of capitalism and how it functions. Adam Smith focused his theories on the role of enlightened self-interest led by an invisible hand or incorrectly the invisible guiding hand, and the role of specialisation in promoting the efficiency of capital accumulation. Some proponents of capitalism emphasize the role of free markets, which, they claim, promote freedom and democracy. For many, capitalism hinges on the extension into a global dimension of an economic system in which goods and services are traded with others and capital goods belong to private ownership. To Karl Marx defined capitalism by the creation of a labor market in which most people have to sell their labor in order†¦show more content†¦He described his own preferred economic system as the system of natural liberty. However, Smith defined capital as stock, and profit as the just expectation of retaining the revenue from improvements made to that stock. Smi th also viewed capital improvement as being the proper central aim of the economic and political system. A major difference between Adam Smiths view of economics and that of present day capitalist theory is that Adam Smith viewed value as a product of labor, and thus operated under the Labor Theory of Value, which was used by basically all economists until the Labor Theory of Value became central to Marxism. According to Marx, the treatment of labor as a commodity led to people valuing things more in terms of their price rather than their usefulness, and hence to an expansion of the system of commodities. Marx also observed that some people bought commodities in order to use them, while others bought them in order to sell them on at a profit. Marx defines capital as money and capitalist production as the use of money to denominate wealth in money terms; these labels refer to John Stuart Mills definition of value in a market economy as being the going price for a good or service. Marx expanded on the Labor Theory of Value to show that according to the Labor Theory of Value, which was the theory of value that was used by Adam Smith,Show MoreRelatedModernity and Classical Sociology Theory Essays1855 Words   |  8 Pages Paul de Man once said, â€Å"Modernity exists in the form of a desire to wipe out whatever came earlier, in the hope of reaching at least a point that could be called a true present, a point of origin that marks a new departure.† But what is he really trying to say? Modernity takes out the old and brings in the new, continually upgrading to something else? Modernity appears as a concept of change. It most commonly refers to the social conditions, processes, and discourses resulting from the Age ofRead MoreOne Significant Change That Has Occurred in the World Between 1900 and 2005. 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