Question

26. How did Smith and Marx define the economic classes that were central to their analysis? According to Smith, which of the classes have interests that do not necessarily align with society’s general interests? Did Marx agree with Smith on this point or did he feel a different class held interests that were different from Society’s?

Answer 1

Spanning three centuries of history, from the dawn of the industrial age to modern times, three diverse thinkers developed their own landmark theories on commerce, labor, and the global economy.

Marx’s attitude toward capitalism was scathing. In an age when “the Industrial Revolution had changed the process of production into a factory system and created a new ruling class of factory owners” , Marx perceived injustice, inequality, and the inevitability of change. Marx and his frequent coauthor, Friedrich Engels were outraged at the hardships faced by the working classes of industrial European cities, and they channeled this anger into two monumental written works that formed the basis of modern communism:

Marx’s analysis sees the “history of all...societies the history of class struggle.” Marx interpreted human history as a series of eras, each defined by systems for producing goods, which created classes of rulers and the ruled. This process had already progressed from slavery to feudalism to capitalism and, in Marx’s view, would eventually lead to a classless society called communism.

He believed that “capitalists” (the owners of the machines, property, and infrastructure used to produce things) were a separate class from the workers, or “proletariat,” who own nothing but the right to sell their labor in exchange for wages. Marx theorized that capitalists, in competition with each other for profits, would squeeze as much work as possible out of the proletariat at the lowest possible price. Furthermore, competition would cause some capitalists’ firms to fail, increasing unemployment (and thus misery and poverty) among the proletariat. Innovations in technology were not necessarily positive; new machines would add to unemployment (by rendering human labor increasingly inefficient and obsolete) while also making work dull, repetitive, and alienating.

Yet Marx was not altogether dismissive of capitalism, which he saw as a necessary stage for building a society’s standard of living. But in his view, the proletariat’s discontent would inevitably lead it to overthrow the ruling classes and create a more equitable society, at first socialist (wherein the state would control the economy and distribute resources more evenly) and then purely communist (a stateless, classless, egalitarian society without private property or nationality).

As a theory, Marxism is arguably more durable. While some believe that communism’s decline disproves Marx, others draw upon his approach to critique economic phenomena on social grounds. Even as capitalism defines most of the world’s economies, Marxism remains alive in “the idea that capitalism can undergo serious scrutiny and adaptation

Smith never uses the term "capitalism;" it does not enter into widespread use until the late nineteenth century. Instead, he uses "commercial society," a phrase that emphasizes his belief that the economic is only one component of the human condition. And while, for Smith, a nation's economic "stage" helps define its social and political structures, he is also clear that the moral character of a people is the ultimate measure of their humanity. To investigate Smith's work, therefore, is to ask many of the great questions that we all struggle with today, including those that emphasize the relationship of morality and economics. Smith asks why individuals should be moral. He offers models for how people should treat themselves and others. He argues that scientific method can lead to moral discovery, and he presents a blueprint for a just society that concerns itself with its least well-off members, not just those with economic success. Adam Smith's philosophy bears little resemblance to the libertarian caricature put forth by proponents of laissez faire markets who describe humans solely as homo economicus. For Smith, the market is a mechanism of morality and social support.

In particular, Smith held his teacher Francis Hutcheson in high esteem. One of the early leaders of the philosophical movement now called the Scottish Enlightenment, Hutcheson was a proponent of moral sense theory, the position that human beings make moral judgments using their sentiments rather than their "rational" capacities. According to Hutcheson, a sense of unity among human beings allows for the possibility of other-oriented actions even though individuals are often motivated by self-interest. The moral sense, which is a form of benevolence, elicits a feeling of approval in those witnessing moral acts. Hutcheson opposed ethical egoism, the notion that individuals ought to be motivated by their own interests ultimately, even when they cooperate with others on a common project.