Adam Smith vs. Karl Marx

Kempton & Patten

Global History II

Mepham High School

Adam Smith

The father of Capitalism.

Book - 1776, The Wealth of Nations.

What is Capitalism?

An economic theory where individuals control the means of production and the markets set the prices.

Beliefs of Smith

Laissez-faire: Government should keep its “hands off” business.

Competition and Incentive.

The Invisible Hand: Prices would be set by “market forces” meaning the consumer.

Elements of Capitalism

Property Private

Government Regulations Minimal

Safety net for those who fail None

Control of the Means of Production

Private

““It is not from the benevolence It is not from the benevolence (good heartedness) of the (good heartedness) of the butcher, the brewer, or the butcher, the brewer, or the baker that we expect our baker that we expect our dinner, but from their regard to dinner, but from their regard to their own interest.” their own interest.”

Adam Smith.Adam Smith.

Karl Marx

An Industrial Revolution era philosopher who supported the rights of the proletariat.

Book – 1848, The Communist Manifesto.

What is Communism?

It is characterized by state control of the economy, and restriction on personal freedoms.

Beliefs of Marx

History is the history of class struggle Haves vs. Have Nots

The workers must unite to overthrow the owners

Shared ownership (no private property)

The workers control the means of production.

Elements of Communism

Property Shared

Government Regulations Maximum

Safety net for those who fail Yes

Control of the Means of Production

Government/People