Adam Smith and Karl Marx Difference Essay

The market would always be equilibrium. There would only be a limited role for the government in the economic system. Karl Marx disagreed and thought that workers would have an advantage because they are already rich and there would be a disadvantage to the poor. The rich would only get richer and the poor would only get poorer. He came out with a theory called the labor theory of value. The claims that the value of a good or service is directly connected to the mount of labor required for its production.

Marx thought that the two classes in society, the bourgeoisie and the proletariat, will remain stuck in their respective classes because of the very nature of capitalism. The wealthy bourgeoisie owns the factories and also dominates the media, universities, government, bureaucracy, and hence. Their position on the social status is unchangeable. The poor proletariat are only able to work hard. Marx thought that to fix this problem; the poor would have to revolt and create a ewe social order where there would be no distinction between segments of society.

Adam Smith thought that capitalism was the most ideal economic system. Adam also opposed the idea of revolution to restore justice for the masses because he valued order and stability over relief and oppression. Marx thought that capitalism would lead to instability and injustice in a society. Marx thought that communism offered the best model both politically and economically. Smith did not put the spotlight on the land holdings or the riches or the aristocracy like Marx.

Smith believed that in a free market, an individual would be able to earn and spend in market freely, and it would allow a worker to act as a consumer as well. One of the faults with capitalism that Karl Marx discovered was the tendency for each economic agent to maximize his profits. In conclusion, while both Adam Smith and Karl Marx agreed on a few core idea, they differed on the method of production of goods and services and distribution of resources.