Who (either Adam Smith or Karl Marx) is the most relevant to our understandings of capitalism?...

Who (either Adam Smith or Karl Marx) is the most relevant to our understandings of capitalism? (maximum of 300 words)

Expert Solution

Capitalism means an economy or a state where markets, trade and industry are under the control of private businessmen rather than the Government, for the objective of profit maximization and not service.

Adam Smith, also known as the Father of Economics, gave us the idea of 'Invisible Hand' which states that market should function through independent demand and supply forces. The prices and quantities should be determined by producer to producer and not by State. He also gave us the concept of 'laissez faire' which means least/minimum government intervention. This makes him the biggest advocate of Capitalism, which also supports minimum Government intervention.

On the other hand, Karl Marx saw capitalism as the social enemy of his ideal of a classless society. According to him, Capitalism derives profits and while doing so exploits the workers. All the while, making a few richer and many poorer.

Hence, Adam Smith is most relevant for understanding Capitalism.

NOTE : These are just minor points made about either of the two names mentioned here, the actual answer should make use of these points and explain further.

Rahul Sunny answered 1 year ago

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