Compare And Contrast Adam Smith And Karl Marx

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Adam Smith, an advocate of capitalism, in his book, The Wealth of Nations wrote that all individuals are selfish and by performing to the best of their capabilities towards their own selfish interests they contribute towards the nation’s collective growth. Karl Marx, on the other hand criticized capitalism and believed that socialism and communism are society’s best chance of maximizing individual happiness, about which he wrote in his book Das Kapital. In this paper, we will compare and contrast the economics theories of Adam Smith and Karl Marx on the lines of labor theory of value, division of labor, alienation of workers from labor and human happiness and surplus profit and its social implications. This paper will also discuss how…
Adam Smith believes that there are two types of ‘values’ of a commodity – ‘utility value’ and ‘exchange value’. The utility value of a commodity is based on how useful a commodity is and the exchange value of a commodity refers to how much we can get in exchange for a commodity if we were to sell it. Smith says that the exchange value of a commodity is measured in terms of several different types of prices. The nominal price of a commodity is the measure of exchange value in terms of money and the real price is in terms of the amount of labor it took to produce it. Thus, according to Smith, “The real price of everything, what everything really costs to the man who wants to acquire it, is the toil and trouble of acquiring it” and what

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