It is necessary to mention that the influence of the capitalist market economy on impoverished working people is the topic that has been actively discussed over the last few years. Karl Marx and Adam Smith are two prominent figures whose works are praised and commonly studied. A contrast between their ideas is quite significant, and it can be explained by the fact that they valued different aspects and the way they perceived the working class also varied. It would be reasonable to examine both works to determine which argument is more reasonable.
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Adam Smith has acknowledged the fact that inequality caused by the capitalist market economy is enormous. He was concerned about the fact that wealthy people could not contribute to society, and it could have an impact on the working class. Smith states that “no society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable” (65 ch. 8). On the other hand, he suggests that people are too focused on the riches of others, and it is one of their primary problems.
He understood that impoverished individuals would not be satisfied when the disparity of wages increases, and it could lead to complications. The proposed state of equilibrium could ensure that the balance is rational, and every individual will have an opportunity to earn the necessary goods. He believed that the capitalist market is beneficial to impoverished people because they will have opportunities to become wealthy in the future.
He suggested that freedom related to personal development should be viewed as incredibly valuable. However, it is possible to argue with this position. The problem is that individuals born in impoverished families live in an environment that does not support education. Moreover, one may not be able to attend college because of the situation at home. It is true that the smartest students will be able to receive scholarships, but they also will have to deal with numerous problems and barriers.
One of the aspects that need to be discussed is that Adam Smith did not suggest that working people should focus on selfishness and maximizations of profits. He argued that it would be possible to become relatively wealthy if one is motivated and determined. The suggestion that the introduction of new technologies has an impact on the psyche of a person is rather interesting. Smith believed that individuals that produce goods would be dehumanized in the long-term.
However, it is paramount to note that the statement is questionable. Individuals appreciate the devices that make their work much easier, and the connection with the products is quite exaggerated. Moreover, he argued that companies may not reduce the reward for work significantly because employees would move to the competitors, and stated that the situation could regulate itself because of the way the market works.
Marx believed that the working class would be exploited under the capitalist market economy. He suggested that they would have all the right to disagree with the situation because they are responsible for the production of valuable goods, and their contribution to the economy is undervalued. Moreover, philosophers stated that such a system could lead to a social revolution. He has predicted that the disparity in income would continue to rise, and it would leave many individuals without the necessary resources. Economic crises associated with this system also should be highlighted, and the economist suggested that they would hurt working people the most.
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Marx claimed that “all means for the development of production transform themselves into means of domination over and exploitation of, the producers” (45 ch. 25). In other words, he believed that it leads to the introduction of differences between the classes, and relations are also affected dramatically. Adam Smith has criticized the working-class and argued that such individuals cannot participate in rational conversations because their knowledge is limited.
On the other hand, Marx has focused on different aspects and believed that the production of goods is of utmost importance. He argued that the lack of control from the side of the government could lead to the introduction of numerous complications related to labor and the economy. He was too worried about the fact that firms could get much more powerful in the future, and they will be able to take advantage of the working class.
Also, another intriguing aspect that needs to be discussed is that it is suggested that laborers are closely connected to the capital. An increase of wealth at one side leads to starvation and impoverishment at the other, and the philosopher believes that such treatment of people that produce most of the goods is not justified. The arguments are quite comprehensive because several contradictions in the structure of this economic system are present, and it leads to class conflicts. Impoverished workers are disadvantaged in this case because they lack the control of the situation. The alienation theory that the economist proposes is quite similar to the ideas suggested by Smith.
However, he made the same mistake in this case and did not consider the fact that technologies could be improved in the future, and the outcome of the machine age is going to be beneficial. Another weakness is that many of his arguments are based on assumptions.
It is possible to identify a particular connection between modern society and the ideas suggested by Marx. It is quite evident that humanity has the necessary resources to provide high-quality healthcare and housing to every individual. However, the distribution of wealth is not proportional, and funds are not utilized efficiently. It can be seen that impoverished individuals all over the world voice their opinions about the whole situation, and they are given a platform to speak about such issues. On the other hand, it is possible to argue that a social revolution is not likely to happen at this point. Factory workers became much more educated because they are provided with a broad range of benefits and opportunities for training. The introduction of new technologies also played a crucial role because it makes most of the operations much easier.
The biggest problem at the moment is that Marx was too focused on the labor process and undervalued other aspects that are crucial for every individual.
Adam Smith’s stance on the influence of the capitalist market economy seems much more appropriate because he has recognized that it would lead to enormous benefits in the long-term. On the other hand, Marx has warned other scholars about the dissimilarity in earnings associated with this system, and the argument is justified. However, it is possible to argue with his stance on the influence of companies.
Employers have to consider the needs of workers most of the time, and cannot set wages that are unreasonably low. The fact that the government plays a role in the capitalist market needs to be discussed. It helps to address some of the weaknesses that the approach has because numerous policies that help working people are introduced. Moreover, this also supports the argument that the system is beneficial to impoverished people because most of the expenses are covered via taxation, and wealthy individuals help to generate the funds.
Marx’s analysis can be perceived as less relevant nowadays because the situation has changed dramatically over the years. Some of the comments or statements by Adam Smith regarding impoverished people can be viewed as inappropriate, but he was right that the role of education should not be overlooked, and it is one of the best systems that would help to increase their skills.
In summary, it is possible to state that the ideas suggested by both these authors are quite reasonable and may be applied to modern societies. However, Adam Smith’s arguments are much closer to reality. One of the reasons he was able to predict the current situation is that he has acknowledged the value of knowledge and the impact that it has on all the societies. Marx’s perspective on the way the system affects working people was influenced by his other beliefs.
The biggest problem is that he was too focused on the direct socioeconomic factors related to the capitalist market, and has overlooked the associated benefits that it offers. Overall, it is quite evident that Smith’s opinion on this subject matter is much more appropriate. However, it is possible to improve the current system, and all the necessary resources are available.
Marx, Karl. Capital: A Critique of Political Economy, vol. 1, New York, NY: International Publishers, 1887. Print.
Smith, Adam. An Inquiry into the Nature and Causes of the Wealth of Nations, South London, UK: W. Strahan and T. Cadell, 1776. Print.