MLM Directory

what were the major differences between Adam Smith's free market ideas and Karl Marx's socialist ideas?

Public Comments

1. Smith wanted to let the "invisible hand" of the free market economy guide the production of profit and wealth. Marx thought that was a recipe for permanently oppressing the lower classes and working classes, and widening the gap between rich and poor.
2. people pursuing their own interests will benefit themselves and others- Adam Smith people pursuing their own interests will cause workers to be exploited- Karl Marx
3. Penny hit it right on the head! With this primary difference one should be able to dig a little deeper into ones own knowledge and figure out what other major differences were there.
4. Adam Smith argued that the free market would bring widespread prosperity. He also argued that, in competition, commodity prices would tend to fall towards labor costs, so profits would disappear, though, in monopolies, they would not. Many early socialists, such as Thomas Hodgskin and Pierre-Joseph Proudhon, agreed with Smith's analysis. They argued the various artificial property rights, monopolies, privileges, etc. made exploitation possible and that genuinely free markets would make exploitation impossible. Karl Marx rejected the above analysis, and responded with his own. He argued that, in any market, the price of labor-power would tend to fall to the cost of labor-power, i.e. the bare minimum for survival. So markets would make exploitation inevitable.