Capitalism: Karl Marx vs Adam Smith

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Marx v. Smith on Capitalism

Capitalism, according to the Encyclopaedia Britannica, is “the means in which production are privately owned and production is guided and income is disputed largely through the operation of markets”. Capitalism saw the emergence after the feudal system of Western Europe can do a halt. Many economists, even today, dispute the simple beginnings of capitalism. Some theories range from religious reasons, such as the rise of Protestant Reformation in the 1500s, to the enclosure movement in England. How capitalism differs from the feudal system that preceded it is fairly simple. Prior to capitalism the title in economic system at the time consisted of kings, lords and serfs. An example country would be ruled ultimately by a king who would have several lords in charge of various provinces. They would rule over the peasantry who never really had an incentive, other than their own subsistence, to work for the lord. For many complex events that underwent in Europe during the mid to late 1500s, this system came to an end and was replaced by capitalism.

Two of the most prominent people usually cited in the study of capitalism is Adam Smith and Karl Marx. Adam Smith, often referred to as the father of modern capitalism theory, wrote his great work The Wealth of Nations in 1776. His belief was that capitalism arose out of property rights, allowing ordinary citizens to keep the rewards of all of the productive labor, and the division of labor, which changed the amount of time it took to produce goods. This division of labor meant that it was no longer necessary to have only an artisan craft goods because now you can split the task amongst the group of people who would all share the labor and produce that same good at fraction of the time.

Karl Marx had the luxury of coming after Adam Smith and thus was able to critique his idea when he gave his explanation of how capitalism arose. The main reason for Karl Marx was primitive...
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