Introduction
and thesis
How much authority should be placed in
the state? German philosopher, Karl Marx, believed capitalism contained the
seeds of its own destruction and that communism was the inevitable end to the
process of evolution begun with feudalism and passing through capitalism and
socialism (Beales Kaidantzis, 2008). Scottish
philosopher, Adam Smith, believed that economic development was best fostered
in an environment of free competition that operated in accordance with
universal “natural laws” but also felt that the government should enforce
contracts, copyrights, and grant patents to encourage inventions and new ideas
as well as provide public works (Henderson, 2008). Analysis and
contrast of the views of Karl Marx and Adam Smith reveal these philosophers’
markedly different views of how much authority should be placed in the role of
state through their individual interpretations of how human nature morally interacts
and how those actions determine the level of governance needed to create a
society that produces the most benefit.
Karl
Marx
Karl Marx’s views on how much authority
should be placed in the role of state are intertwined with the symbolic role of
money as a representation of social labor. Information retrieved from journal
article: Marx and the Mixed Economy:
Money, Accumulation, and the Role of the State, author Ann E. Davis
ascertains that Marx notes the role of the state is in the issue of money (Davis, 2010). The author quotes Karl Marx, “Coining, like
the establishment of a standard of price, is the business of the State because
money is “purely conventional” and must have “general acceptance”” (Davis, 2010). The author explains
how Marx felt that money should be managed by the state in proper proportion to
gold. The author discusses how Marx analyzed that the role of state is integral
to the issue and management of money with money being the manner in which all
contracts are settled including taxes as well as payments for wages and
commodities (Davis, 2010). Information from
the article also suggests that Marx felt that the gold and silver were typical
substance that were the universally equivalent of the symbolic role of money as
representative of social labor (Davis, 2010). Marx believed in complete socialism where
everything is owned by the people and private property should cease to exist (Ollman, 2004). Marx felt that all
land, factories, mines, and businesses should be owned by the people (Ollman, 2004). Marx believed that
all food and goods should be equally shared by all (Ollman, 2004). Marx felt that
government should equal the people and there should be complete equality and no
social classes (Otteson, nd).
Karl Marx’s view of the level of
authority needed to ensure the most benefit within a society was one in which Marx
felt that a powerful state should be assumed. Karl Marx believed that the role
of state is integral to the issue and management of money with money being the
manner in which all contracts are settled including taxes as well as payments
for wages and commodities (Davis, 2010). Marx viewed
capitalism as a systematic misrecognition by implying that individuals are
taken not as human beings, but as means of production (Lofton, 2012). Marx contrasted
capitalist views in that he maintained that people come to believe certain
confused ideas about themselves in the world, and Marx felt those ideas were
successful precisely because they seemed liberating, and not oppressing (Lofton, 2012).
Karl Marx rationale of how much authority
should be placed in the role of state was one in which Marx believed workers
were exploited and disadvantaged by a capitalist system (Davis, 2010). Marx believed that
capitalism created problems through permanent social classes. Marx’s views also
viewed that under capitalism the poor will suffer because they always be poor. Marx
felt that the capacity to issue money is complimentary with other roles of the
state such as protection of private property, adjudication of that private
property, and the development and protection of foreign markets (Davis, 2010). Marx believed that
the commodity form of labor power managed by means of legislation with the
associated authority of the capitalist firm (Davis, 2010). Karl Marx believed
“the prodigality of the capitalist never possesses the bona-fide of the
open-handed feudal lord’s prodigality, but on the contrary has always lurking
behind it, the most sordid avarice and the most anxious calculation” (Baumol, 1976). Karl Marx believed
that economic forces predicted and determined the outcome of a society (Ollman, 2004).
Adam
Smith
Adam Smith’s views on how much authority
should be placed in the role is primarily based on the notion that the role of
state should be limited but well defined.
In journal article: Unintended
Order & Intervention: Adam Smith's Theory of the Role of the State,
author: Jeffrey T. Young, the author explains that Smith’s system of natural
liberty stating that the sovereign has only three duties to attend to; three
duties of great importance, indeed, but plain and intelligible to common
understandings: first, the duty of protecting the society from the violence and
invasion of other independent societies; secondly, the duty of protecting, as
far as possible, every member of the society from the injustice and oppression
of every other member of it, or the duty of establishing an exact administration
of justice; and thirdly, the duty of erecting and maintaining certain public
works and certain public institutions, which it can never be for the interest
of any individual, or small number of individuals, to erect and maintain;
because the profit could never repay the expense to any individual or small
number of individuals, though it may frequently do much more than repay it to a
great society (Young, 2005).
Adam Smith’s view of the level of
authority needed to ensure the most benefit within a society is derived from Smith’s
avid belief that the role of state should be limited but well defined
supporting the three natural laws of economics (Lipford &
Slice, 2007).
Smith three natural laws of economics include: the natural law of
self-interest; the natural law of competition; and the natural law of supply
and demand (Otteson, nd). Smith’s view was one in which Smith believed
in “Laissez Faire” economics in whereas free trade equals no government
regulation or interaction and that nations do not grow wealthy from tariffs (Otteson, nd). Smith’s “Laissez
Faire” economics include free market; free economy; and natural laws (Otteson, nd). In an Independent
Review journal article entitled: Adam
Smith's Roles for Government & Contemporary U.S. Government Roles, by
authors: Jody W. Lipford & Jerry Slice find that Adam Smith viewpoint
pertaining to government's proper roles in one of which government's proper
role in society should be limited but well defined noting that Smith believed
that government should provide national defense, the administration of justice
and public goods (Lipford & Slice, 2007).
Adam Smith’s rationale of how much
authority should be placed in the role of state is supported by Smith’s belief
that limited authority enables the free market which is most economically
beneficial to society by promoting self-interest (Lipford &
Slice, 2007)
Smith felt that the division of labor exploits knowledge and specialization
leads to surplus and in turn surplus leading to increasing goods and decreasing
prices resulting in “universal opulence” (McQuillan, 1982). The rationale for
Smith’s beliefs is one in which Smith proposes that that each individual would
work in his own self- interest for his own benefit (Lipford &
Slice, 2007).
Smith believed by in doing so, that the people would in turn develop a market
where only the value of the perceived benefit expected to delivered by the good
and the producers would only sell products for as much as or higher than they
would have spent on producing a good (Lipford & Slice, 2007). Smith felt that the
obvious and simple system of natural liberty would enable more and more to
ascend out of poverty (Otteson, nd). Smith’s idealistic economy would be one in
which there would be no surplus or deficit supply or demand; markets would
always be equal, benefiting both consumer and producer (Lipford &
Slice, 2007).
Adam Smith felt that “it would be a serious mistake to entrust the economic
welfare of a society to the good intentions of any man” (Baumol, 1976).
Key
Contrasts
Key Contrasts of Karl Marx views and
that of Adam Smith. Information retrieved from journal article: THE GOOD SOCIETY: LESSONS FOR INTEGRATED
GOVERNANCE, author Christina Neesham notes that the key contrast of Smith’s
vs. Marx’s views is Smith’s system of natural liberty and Marx’s political
economy of human value (Neesham, 2009). Smith
felt that through the removal of state intervention in economic activities, the
perfect system of natural liberty delivers invaluable benefits, such as fair
distribution of wealth, equality and justice (Baumol, 1976). Marx's view of the
role of state as one in which government is only needed in the revolutionary
and socialist stages (Neesham, 2009). The author states
that Marx's view implies that based on centrally planned economy, mature
communism will have the resources to do away with both government and the
market, and enjoy the triumph of civil society (Neesham,
2009).
Marx believed in complete socialism in which everything is owned and shared by
people including businesses and that all private property should cease to exist (McQuillan,
1982).
Smith believed that all companies should be private and free trade, free
competition, and the abolition of special privileges (state enforced monopolies
will lead to economic prosperity for every one including workers (Otteson, nd)
Conclusion
Adam Smith proposed that the free
market, where merchants and manufacturers are free to produce and trade as much
as they want and the prices are based upon what the consumers are willing to
pay, would result in the most efficient and desirable economic outcome due to
the “Invisible Hand” (Baumol, 1976).. Smith preferring stability, sought peace over
revolution. Karl Marx believed that capitalism was fundamentally linked to a society
in which it is essentially bound by segments of class which fueled his suggestion
of a revolution by the working class against the middle class in hopes of
creating a more equal society (Baumol, 1976). Analysis and
contrast of the views of Karl Marx and Adam Smith reveal these philosophers’
markedly different views of how much authority should be placed in the role of
state based is upon their individual interpretations of how human nature
morally interacts ultimately promoting two very different philosophies on how
human interaction determines the level of governance needed to create a society
that produces the most benefit.
References
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MORALITY AND THE SOCIAL INTEREST. American Economist, 20(2), 1-6.
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Beales Kaidantzis, J. (2008). Karl Marx (1818-1883) The
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http://www.econlib.org/library/Enc/bios/Marx.html
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