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Economic and Political Systems

Autor:   •  March 24, 2013  •  Essay  •  675 Words (3 Pages)  •  1,455 Views

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Humans have used different economic and political systems since our days as hunter-gatherers. Gradually, these systems have developed and become more complex, accommodating for different situations and catering to people in different societal roles. Karl Marx and Adam Smith show the differences and similarities in contrasting economic systems through their works. Karl Marx, author of the “Communist Manifesto”, and Adam Smith, author of “An Inquiry into the Nature and Causes of the Wealth of Nations”, both saw different solutions to the issues that plagued modern European economies.

The Communist Manifesto and The wealth of nations differ on their views of not only economy, but values within a society as well. Karl Marx, author of The Communist Manifesto, divides his society into the Proletarians and the Bourgeois. The former are those in a society who own means of production and employ the proletarians, or wage laborers. Marx discusses how the bourgeois have corrupted the family values that help hold society together. Communism in itself is very unmaterialistic, because if the demand for material objects continues to increase, so does the pocket of the bourgeoisie at the expense of the proletariat. The bourgeoisie and the capitalist system according to Marx have “…resolved personal worth into exchange value”, and “…[have] reduced the family relation to a mere money relation.” In essence, Marx believes the capitalist system is tearing apart societal values for profit.

Smith, on the other hand, sees capitalism as a means to increase GDP, and free trade as a means to increase income and balance the market. He sees free trade as the ‘invisible hand’ that controls the market. With buyers and sellers negotiating prices, it drives price to be just high enough to benefit most involved in production, but still leaving the worker with little money or benefits. Marx sees the government as the not so invisible hand that will ultimately stabilize the economy while raising wages for the proletariat to distribute wealth evenly.

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