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C. Adlai, Software Developer, B.E (Bachelor of Engineering), California, USA
Answered Jun 11, 2020
Adam Smith and Karl Marx were both influential and astute economists from their day. Adam Smith had proposed that the free market would result in the most desirable outcome for both consumers and producers. Consumers would pay what they believed to be the value of the goods they are purchasing, and manufacturers would only sell for as much or more than they would have spent on producing their products.
His ideas allowed for the notion of equilibrium in which both parties benefitted from the sale. Karl Marx, on the other hand, Marx’s ideas centered around being a capitalist, which meant that the cost of a good or service is directly linked to the amount of labor required for its production. Marx thought that there were only two classes of people, the rich and the poor. Marx was attempting to encourage a revolt in society that would allow for change to occur.
Adam Smith and Karl Marx are two of the economists who had different theories on the economy. Adam Smith believed in capitalism, which is the philosophy that the government has no involvement in the economy. Instead, he believed that the market should be left up to the people. The people, along with their competition, would have control over pricing, supply, and demand.
Along with that, rich people would help those that are in need. On the other hand, Karl Marx believed in communism. This philosophy focused on struggles between classes and that the government has control over the price, supply, and demand.
G. Deacon, Civil Engineer, B.E(Bachelor of Engineering), Trenton, New Jersey
Answered Jun 09, 2020
One of the major differences between Adam Smith and Karl Marx is their respective position on some issues. A perfect example of this was their approaches to a system of an economy that is based on private ownership of the means of production without the involvement of the government. Adam Smith believed that an ideal economy is one that allows private businesses to take over the means of production so that they will be able to produce as much as they can, depending on the needs of their consumers. According to him, this would also help them to regulate the price of their products based on the amount spent on production.
He believed that consumers would only pay based on the value of every product. According to him, capitalism would make the concept of demand and supply to be at equilibrium. In contrast, Karl Marx did not agree with Adam Smith about his view on capitalism. In his view, Karl Marx believed that this idea would further widen the gap between the rich and the poor. He contended that capitalism would also lead to oppression of the poor, injustice, and instability. Karl Marx also supported the idea of revolution as a means to breach the gap between the rich and the poor.