Karl Marx Vs Adam Smith

During the 18th and 19th centuries, there were a series of intense discussions by the great thinkers of the time, on how the economy should be molded going forward. The two most prominent of these intellectuals were Karl Marx and Adam Smith. Combined they shared a vision of an emerging social system, which they had foreseen; and what we now know as capitalism. Marx called his theory “the capitalist mode of production”, while Smith referred to the idea as the “society of perfect liberty”. There are several similarities and differences between the two social systems, and through these ideas, we can find how the economic system we use today came to exist. Classic Economics was an ideology that came about when the evolution from a feudal to a
Older than Karl Marx, Smith studied at the University of Glasgow in Scotland. He then continued his education at Balliol College at Oxford, studying moral philosophy as well as Latin, history, and English. (Biography, 2). Smith then continued on to become a professor of economics and philosophy, and is best known for his 1776 Inquiry into the Nature and Causes of the Wealth of Nations. This book was created in order to show his beliefs on how economies should be run as a best-case scenario in his opinion. This book was widely used as a basis for future economists’ theorem, including Karl Marx, and also helped to accredit Smith with the title of father of modern economics. Prior to writing the book that made him the figurehead for modern economics, Smith wrote a lesser known book in 1759 on the psychological side of economic theory. In this book, Theory of Moral Sentiments, Smith projected the ideas he believed in terms of how emotions could affect the individuals in the economy, and to a lesser extent, the economy as a whole through the actions of the individual. These ideas included the concept of two different types of moral values, which could be used to benefit the individual in the economy. These values could be used for what Smith called both “noble” and “commercial” use. When looking at the commercial aspect to his theory, Smith wanted them to be used within business,
Comparative advantage according to Ricardo was the mathematical proof that if two countries both specialize in a specific good, and can out produce the other in that good, then that country has a comparative advantage. If those two countries then trade, they will both come out with more than they would if they tried to create both goods by themselves. Smith also had the basis of this idea in his book The Wealth of Nations, where he states, “if a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry, employed in a way in which we have some advantage " (Smith Wealth of Nations). Ricardo takes Smith’s ideas and builds on them to create a more solidified theory on international trade between nations. Ricardo also believed that the labor theory of value showed how wages and profits were able to determine prices for products that were then able to determine rent. Ricardo spent a lot of time showing how this system worked, as he used multiple models to calculate his findings. Marx on the other hand looked at the labor theory of value as production prices equal to capital and living. Marx relied on prices as the end result, just like Ricardo did, but not in the same sense. Ricardo used a method that determined the value of the