The Canadian Economy- Smith or Marx Theory? Essay

This essay has a total of 1287 words and 6 pages.

The Canadian Economy- Smith or Marx Theory?



The economic concepts that were visualized by Adam Smith and Karl Marx lead to the idea
that Canada fits towards both quite well. Their concepts are reflected quite clearly in
the economic situation of Canada, and the theories of both can be applied. In a way, both
Marx and Smith would be pleased with the economy of Canada, as it lends to their ideas and
presents a positive economy for Canadian residents. While some may argue that Canadian
economy should be a bit more as their southern neighbor the United States, it is also
argued that Canada's mixed economy provides a perfect blend of corporate and government
responsibility.


When it comes the Smith's theories, the one that stands out the most would be his theory
of the "invisible hand". This "hand" controlled the economy by driving prices down through
competition and resources. This metaphorical "hand" exists today in Canada, as the
citizens benefit from variety. The variety of products and services available almost
always leave room for an alternative, which is what, in effect, forces prices to be lower.
Canada's "invisible hand" may take the modern form of technology, as it affects the means
by which products are produced. If for instance, a new mode of manufacturing Product A is
formulated, and it allows Product A to be manufactured at a lower price, then the price of
Product A will be cheaper. This causes the competitive price to drop, which allows
consumers to benefit from lower prices. The division of labour does exist, however not to
the intensity Smith stated in his theory. In companies today, there is a specialization of
a sort to specific positions, but usually it is not to one specific task, but to an area.
There are, however, exceptions, such in factory work, when an employee may do the same job
for a long period of time. The specialization of workers is, in fact, a management
technique. Fredrick Taylor, occasionally called the "father of scientific management"
developed the concept that for every job a specific rule of motion and training should be
developed in order to increase and achieve maximum productivity. Smith felt that slavery
was an improper use of human resources, as there was no internal drive in a worker who
basically worked for nothing. He would be impressed by the fact that there is no slavery
in our economy and that it is actually against the law. This can lead back to companies
working in our economies, because it plays toward the personal drive of employees.
Employees who receive an incentive are more likely to want to work harder to output more.
The idea of mercantilism barely exists in our society, which is another thing Smith would
like, because our economy does value what he believed determined a country's wealth.
Natural, Human and Technological resources are three of the largest factors that determine
how well our society does. Free trade is a huge concept of Smith that is greatly into play
today. Canada's interdependence is so greatly obvious, and the concept of an open market
is something that even the government takes pride in, as they often include it on websites
trying to encourage outside investment. Free trade is so large a part of the economy that
even agreements, such as the North American Free Trade Agreement (NAFTA), exist and Canada
belongs to groups such as the World Trade Organization (WTO).


Marx would also be pleased with the Canadian economy, as it also reflects many of his
economic theories. His concept that socialism and capitalism could co-exist is in a way
reflected by the Canadian mixed economy. Both social and capital economies are combines
and found in the Canadian economy. For instance, while the government does play a
substantial role, companies are privately owned and operated. The division of labour
exists, and does so for the exact reason Marx expressed. The division of labour leads to
different jobs, which leads to different products available for consumers. The Labour
theory exists in a way, and one could argue that markup is in a way the "worker
exploitation" and that the labour theory may have basis when determining the base price of
the good/service. Surplus value does exist, however it may not be labeled surplus value.
If one examines wages as an expense, the one can say that since Sales-Expenses= Net
Income/Loss, it can be stated that Sales-Wages=Profit. This modern concept of profit is
closely comparable to the concept of Surplus value. One thing Marx would be glad to see
has not truly occurred was his concept of alienation. While there are many tedious and
repetitive positions being held by Canadian workers, most jobs are not of that nature.
Most jobs allow for change and a bit of "breathing room" when it comes to being stuck in
the same monotonous task. Free trade again, is such a great part of the Canadian economy
that it fits perfectly with Marx's ideas. Also, it has done exactly what he stated it
would do. It has broken down the barriers and opens the Canadian economy to the outside
world. It has created a sense of the "global village" which can be respectively compared
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