What Is Marx’s Criticism Of Adam Smith
Throughout the 19th century there was this German philosopher called Karl Marx that later in his life became the founder of the political theory called communism. He has been characterized by writing great books; his most important ones being Capital: A Critique of Political Economy and The Communist Manifesto. In the other hand, there was this Scottish philosopher during the 18th century that was one of the few pioneers of political economy. His very famous and influential book An Inquiry into the Nature and Causes of The Wealth of Nations has become one of the most important works of all times creating the political economic system now called Capitalism. In 1867 Karl Marx published his famous work “Das Kapital” in which he openly criticizes Adam Smith’s theory of capitalism which is defined as an economic system designed for industries to be controlled by private property with the means of generating a profit.
Karl Marx was a true believer that commodities were bought, sold or exchange in value. He defines a commodity to be “first of all, an external object, a thing which through its qualities satisfies human needs of whatever kind”(Marx 125) He states that a commodity is directly connected with the true value of a thing, in other words, an object gains value through that need that has to be satisfied. In Marx’s theory of labor, he states that every single commodity is always exchanged for another good and that it gains its value depending on the amount of labor hours the human being put into work in order to produce that specific product. “As exchange-values, all commodities are merely definite quantities of congealed labour-time” (Marx 130) meaning that the value of a commodity will be high if the labor-time that is required for the production was also high. It’s very important to remember that a product can have more than one exchange value since that tends to happen quite often.
When it comes to talking about the exchange-value, one utility is worth just as much as the other utility, obviously this being said, the quantity provided must be the same. An example of this can be seen in wheat. Wheat is a product with a lot of exchange-value and one quarter of it has the same value as gold, polish, etc. due to the identical magnitude or that it is mutually replaceable. Just like Nicholas Barbon once said: “One sort of wares are as good as another, if the value be equal. There is no difference or distinction in things of equal value…One hundred pounds worth of lead or iron, is of as great a value as one hundred pounds worth of silver and gold. ”(qtd. in Capital) This means that an increase in the quantity of use-value products will generate an increase in the overall wealth of someone while taking into consideration that all products have an equal value depending on the quantity provided of each product.
Adam Smith has been called many times throughout history the “Father of Capitalism”. The reason for this nickname of his is because he was the founder of modern political capitalism. In his work called An Inquiry into the Nature and Causes of The Wealth of Nations, Smith portrays the benefits of Capitalism and the effect it has on production. For him, division of labor is necessary for creating an overall increase in production and it also expands the extent of the market. Karl Marx is not in favor of this theory since he is a true believer of the importance of human production and the effect they have on every product that has been made. Marx argues that the desire of the human being to possess private properties led to the division of labor, which in turn was the main cause of the different social classes seen today that are based in economical differences. In his communist society, division of labor will be destroyed since all men are created equal.
The Communist Manifesto written in 1848 by Marx discusses his different view and ideas as to what is the perfect political and sociological theory. In this society, the philosopher divided them in to two classes: the bourgeoisie and the proletariat in which he later states that both of these two classes will remain stuck in the same class all their lives due to the Capital system imposed by Adam Smith. This would mean that the poor and working class will never have a chance to overcome their struggles and not get any kind of recompense for their hard labor work. A member of the bourgeoisie that was born in that economical class will remain enjoying the benefits of nobility throughout their whole lives at the expense of the working class or how Marx calls them, the “proletarians” When Marx proposed his theory of Communism he also stated that the only way the poor and working class would overcome this struggle is by starting a revolution with the goal in mind of creating a new social order that is opposed to Adam Smith whom he was a true believer of order and stability led by peace rather than a revolution led by oppression. In this new order the different classes will be eliminated completely, private ownership will not be allowed with the goal of having a collective ownership of all the production and reach Marx’s mission of equally distributing wealth among society.
Karl Marx defined value as socially necessary labor time; meaning that a product gains its value depending on the amount of hours and work that were put in by the human being towards creating that product. ”What exclusively determines the magnitude of the value of any article is therefore the amount of labour socially necessary, or the labour-time socially necessary for its production. ”(Marx 129) On the contrary, Smith defined value to be determined by the labor it takes for the commodities to be traded among people. In this theory, value is stated as the increase in profits and productivity rather than the work that was put in to the production like Marx argued. It is very important to understand that utilities are only put in practice when they are being used or consumed rather than when and how it was produced. When the production conditions increases in products, then the productivity of the labor will increase but the value of the commodity will decrease since less labor is needed for the production of the commodity and it will not be able to trade the commodity since the amount of labor put in was not the same.
Adam Smith argues that the human being is very selfish and self-centered which at times make the person very greedy and a competition in the market will rise creating more economic prosperity. For him this result would be amazing since the value of a product in Smith’s theory is measured by the amount of profit it can generate and how can it be traded for other products. One of the causes Marx describes to criticize this conduct among our society is the privatization of property because if that would have never happened, all human beings would be economically equal and the wealth would be equally distributed.
In the political and economic theory of capitalism, the means of production are owned by a small group of people that take advantage of the working class or as Marx calls them “proletarians”. This social class is not able to sell the products they create since all of those products are owned by the higher class and workers are not compensated for the amount of work that was put in the production but instead they have a minimum wage set out by their bosses. In this system, only the bourgeoisie has something to win since the working class are very alienated and discriminated. In Marx’s theory this situation needs to change as he saw society and men as being creative and naturally free but when being part of a capitalist society, they are treated like objects and machines rather than human beings. For Adam Smith on the other hand, human beings are self-centered that are always looking out for their own wealth and not taking into consideration others around them.
After Karl Marx witnessed the effects of Capitalism he decided to create what he called a utopian society where all men are created equal. He truly believed that society would be willing to give up a piece of their happiness to contribute to the greater good. Of course this is too good to be true and it has been seen throughout history with countries that have tried to govern under this Communist system. Obviously the end goal of this theory would be the ideal society but like Adam Smith said in his book, human beings are selfish by nature and will only look out for their own benefit and survival. That is the reason why there has been so many failed Communist governments and instead of equally dividing wealth among the citizens they oppress it.
Both philosophers Karl Marx and Adam Smith possess many similarities and differences as to how they view society and politics. In 1776, Smith published his book The Wealth of Nations in which he discusses division of labor, free market and productivity in relation to the capitalism system. Almost one hundred years after Smith released his masterpiece, in 1867 Marx published his famous work Capital: A Critique of Political Economy in which he openly criticizes Adam Smith’s theory of capitalism. Karl Marx believed that human beings live in a constant struggle under the capitalist system and the only way to change this would be trough a revolution led by the working class and eventually put in place his utopian-like society called Communism.
