The Comparison Of Free Markets From Adam Smith, Keynes, & Karl Marx
In this paper, I will contrast three different views of free markets from Adam Smith, Keynes, and Karl Marx.
Adam Smith supported the ideas of free market, and he believes that it will work positively in the economic society. “Adam Smith is usually thought to argue that the result of everyone pursuing their own interests will be the maximization of the interests of society” (Bishop 1996). He believed that everyone is striving to accomplish the wealthiest by focusing on their own gain. However, one cannot do a business by their own, it will other people to buy or consume it.
In short, the system of free market and division of labor can satisfy the public interest. Adam Smith have composed the invisible hand which has included his perspectives of free market. Smith clarified his perspectives and told any businessmen to focus on the most minimal cost. The buyer decision will be the force that drive the price in the market. Consumers would show their carelessness or interest towards items that available in the market. The producers will be encouraged to bring more products in the market based on the consumer demand. This will create a great general economic in the society when producers bring more requested products in the market while consumers get their favorable items. Based on Adam Smith, this market-based system is a great system which producers are compelled to react as requested by the needs of consumers. He explained that free market is a system which the price is directed based on the supply and demand of the products.
On the other hand, Keynes reprimanded the free market system proposed by Adam Smith. He brought up a few contestations to critic the free market system. Keynes believed that the free market system is unsuitable and wanted to change it with his idea of new economics policies. He specified the economic demolition during the 1920s and 1930s as the result of free market failure. He specified free market system as slightest compelling and opined that every one of the crises can be dispensed with just through the astute right thoughts of illuminated governments. Keynes proposed that the cautious overseeing of the assets by government can dispose of all the economic issues in the economy. He considered the accessible assets of the country adequate to explain all the destitution and need issues of the public.
Next, Karl Marx also criticized the free market system proposed by Adam Smith. He believed that uneven method of free market circulation will support distributive bad form, uneven dispersion of wage and common conflicts. Singular possession would result in the amassing of riches in few hands and will restrict the assets that can be utilized for the society. The proprietors of the business would snatch the most extreme conceivable benefit and no one else would be profited out of it. Private possession and free market system would lead the average workers just to destitution and wretchedness. He added free market system would only bring profit for the private ownership, but not for society as Adam Smith proposed.
Reference:
- Bishop, J. (1995). Adam Smith's Invisible Hand Argument. Journal of Business Ethics, 14(3), 165-180. Retrieved from http://www.jstor.org/stable/25072635 (Accessed: 30 September 2018).
