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Adam Smith vs Karl Marx Who’s the man with the economic plan?
Adam Smith vs Karl Marx
Who’s the man with the economic plan?
Adam Smith
individuals own the means of production (factories, machines, land) and reinvest profits as capital to expand business
Capital – wealth that is invested in order to create more wealth
Adam Smith-
The Wealth of Nations
Laissez-faire- (let do) non-interference of
the government in business
HANDS OFF!
Capitalism
Free Market Economy – One in which consumer choice, the law of supply and demand and competition drives companies decisions regarding what products to produce and the prices of those products.
Adam Smith
3 Laws
Law of Competition
Law of Self Interest
Law of Supply and Demand
Socialism
a theory or system of social organization that promotes:
that the community as a whole should own and control of the means of production (factories / land)
profits from production should be divided amongst the community as a whole
Socialism Continued
Believe capitalist take advantage of workers
Community or state (gov’t) must act to protect workers
Unequal distribution of wealth is unfair (caused by capitalism)
Goods should be divided according to each person’s needs
Karl Marx and Freidrich Engels
The Communist Manifesto
Haves Have-nots
Patrician Plebeian
Noble Serf
1st & 2nd Estates
3rd Estate
Bourgeoisie Proletariat
The New Struggle
Bourgeoisie = owners of business, capital and means of production
Proletariat = working classes, own nothing
Karl Marx (and F. Engels)
The Communist Manifesto
Radical Socialism or Marxism
Workers will seize control of the government and businesses
“Dictatorship of the Proletariat”
Workers would take control of the government
Then what…
redistribute profits equally
own all property in common (no private property)
Socialism Communism
“From each according to his ability, to each according to his need” (all must work, all share in profits)
Economic equality (no more classes)
No government or police would be needed in a community of equals where all is shared government would fade away Communism
“Communist” Countries Today
“Communism” = Dictatorship
never moved passed Marx’s Dictatorship of the Proletariat stage
Examples
–Former USSR (Soviet Union)
–China
–Cuba
–North Korea
Socialist Countries Today
Tend to be democracies
Major Industries owned by the people (Railways, Telephones, TV stations etc.)
Government taxes provide benefits to all citizens (healthcare, free higher education, pensions (retirement), Social security
Examples:
France, Canada, England
What system would they support?
For the following people decide whether they would support:
Socialists - All means of production and all profits are owned by the community together (Owen, Marx) Laissez-Faire Capitalism - Government should keep its hands off business and allow owners to act in their own self interest to seek profit (Smith, Malthus and Ricardo)
Donald Trump
If you don't make him a profit “YOU'RE FIRED!”
Robin HoodRobs from the rich and gives to the poor (ie redistribution of wealth).
Papa Smurf
Leads a self-sufficient community of little blue people living in harmony. All members of the community work together to meet their needs. All have an equal share.
Gargamel
He is in constant pursuit of wealth and doesn't care how many little Smurfs had to die to make him rich. In fact he thought he could turn Smurfs into gold...hmmmmm…
