Adam Smith and Karl Marx

Adam Smith, the father of economics, published The Wealth of Nations in 1776. Although it do little impact in its time, it conceptualised the economy in a radical new way: in terms of individualistic agents, acting out of self-interest. From an individualist perspective, he argued that people produced goods in piece to make money, and made money in order to purchase goods they valued most. The exchange takes place in a market, where prices are set harmonize to costs and the demand for the good. This was a self-regulating system which he described it as beingness controlled as if by an invisible hand. In his system, dig out was the final measure of value?wages (a cost) based on the needs of the player, and rent on the productivity of land. The market acted as a communicator and coordinator (via prices), and a motivator for individuals, such that general welfare was achieved. Another important observation was that the division of labour into work functions allowed for far greater production than a single worker creating the entire product from start to finish (his example was from law-abiding produciton in a pin factory). As a consequence, he saw taxes as a distortion of prices, and thus an occlusion to the general welfare that the market could provide, if unhindered.

At the same time, he allowed that there were things for which the market couldnt accomodate for (roads, sanitation, known as public goods), and which a minimal goernment should provide. Later economists built on this base that there may be goods with externalities (positive or negative), that is side effects from their consumption or production. Next, we have Karl Marx, who conceived of history as a struggle between different types of class. Class was defined according to the relations in the forces of production?those in a high position could exploit those lower. In the feudal mode of production, the lords did not directly control the tools or lands of the peasant, but had control over the... If you want to get a full essay, order it on our website: Ordercustompaper.com

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