marx vs smith by xiuliliaofz


									                                      Laissez Faire vs. Class Struggle-based Communism
Wealth of Nations, Book II, Adam Smith
“government must, undoubtedly, have retarded the natural progress of England towards wealth and improvement, it
has not been able to stop it. The annual produce of its land and labour is, undoubtedly much greater at present than it
was either at the Restoration or at the Revolution. The capital, therefore, annually employed in cultivating this land,
and in maintaining this labour, must likewise be much greater. In the midst of all the exactions of government, this
capital has been silently and gradually accumulated by the private frugality and good conduct of individuals, by their
universal, continual, and uninterrupted effort to better their own condition. It is this effort, protected by law and
allowed by liberty to exert itself in the manner that is most advantageous, which has maintained the progress of
England towards opulence and improvement in almost all former times, and which, it is to be hoped, will do so in all
future times…[The Royal Family] are themselves always, and without any exception, the greatest spendthrifts in the
society. Let them look well after their own expense, and they may safely trust private people with theirs. If their own
extravagance does not ruin the state, that of their subjects never will.”

From the Stanford Encyclopedia, Karl Marx

“Capitalism is distinctive, Marx argues, in that it involves not merely the exchange of commodities, but the
advancement of capital, in the form of money, with the purpose of generating profit through the purchase of
commodities and their transformation into other commodities which can command a higher price, and thus yield a
profit. Marx claims that no previous theorist has been able adequately to explain how capitalism as a whole can
make a profit. Marx’s own solution relies on the idea of exploitation of the worker…The cost of this commodity is
determined in the same way as the cost of every other; i.e. in terms of the amount of socially necessary labour power
requited to produce it…Suppose that such commodities take four hours to produce. Thus the first four hours of the
working day is spent on producing value equivalent to the value of the wages the worker will be paid. This is known
as necessary labour. Any work the worker does above this is known as surplus labour, producing surplus value for
the capitalist. Surplus value, according to Marx, is the source of all profit…Profit, then, is the result of the labour
performed by the worker beyond that necessary to create the value of his or her wages.

        Marx does indeed make the prediction that the rate of profit will fall over time, and this is one of the factors
which leads to the downfall of capitalism.

        [Marx refuses] to accept that capitalism involves a harmony of interests between worker and capitalist,
replacing this with a class based analysis of the worker’s struggle for better wages and conditions of work, versus the
capitalist’s drive for ever greater profits.”

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