The Wealth of Nations vs The Communist Manifesto Essay

This essay has a total of 1300 words and 6 pages.

The Wealth of Nations vs The Communist Manifesto



"The Wealth of Nations" vs. "The Communist Manifesto"

Looking at the beginnings of civilization, one can identify a common theme between almost
all prior cities and nations. This theme was and still is that these civilizations were
structured and divided according to different powers, no matter it being social, economic,
or political power. An example of this can be seen when examining the Feudal system of
the Medieval period, when power was held by kings and lords, while peasants had barely if
any say in rule. Many have had their say in what they believe to be the "utopian system,"
by which nations and states should be run. Their perfect system for economics and society
have been based on a wide array of ideas, ranging from Social Darwinism to needs of all
human beings. Two individuals who held widely differing political views on their ideas of
the "perfect government" were Adam Smith and Karl Marx.

Adam Smith has been regarded to be the father of modern economics, and many of his ideas
have been integrated in a majority of the nations in the present day world. His major
work was "An Inquiry into the Nature and Causes of the Wealth of Nations," where he
discusses many of his economic views. Smith discovered surprising conclusions during his
time, when he applied scientific principles to economic behavior. One of his dramatic
conclusions was that people mainly acted out of their own self-interests, and if permitted
to follow their own interests it created natural social harmony and economic productivity.
This would occur and was led without any conscious control or direction, "as if by an
invisible hand."

According to Smith's "The Wealth of Nations," he held the belief that a greater division
of labor lead to a greater amount of productivity. The more divisions which are created,
the faster a product can be created and therefore a greater quantity can be produced in
the same relative time. With division of labor, the process of manufacturing is broken up
and branched into its very basic parts; instead of creating an entire unit, the worker
preforms one or two basic acts. According to Adam Smith, the size of a particular market
limits the divisions and size of a manufacturer. Due to the extra productivity from the
divisions in labor, the market must be able to meet the surplus created or the
manufacturer will suffer.

According to Smith's economic ideas, a person's own labor can supply all of their needs.
Someone can purchase or command commodities which they need or want, and are created by
other people's labor, according to their own labor, and therefore their earnings. The
commodities which they can command, classify them as rich or poor, and are usually of
equal value as their labor.

In "The Wealth of Nations," Smith also describes his ideas on supply and demand, which
hold true to this day. According to his writings, if a quantity of any commodity which is
brought into a market, falls short of consumer demand, then a competition will begin for
the purchase of the product and the market price will rise above the natural price. If a
quantity of any commodity which is brought into a market, exceeds consumer demand, then
the buyers are willing to pay less and the market price will fall below the natural price.
The goal of manufacturers is to provide a quantity of the commodity to equal buyer
demand, and therefore the market price will be near the natural price. Smith believed
that social progress would result from free trade and a self-regulating economy. He
stated that government should have a "hands off" policy when dealing with the economy,
because when pursuing a person's own interest they frequently promote the interest of the
entire society, more effectively than the actions of the government.

"The Wealth of Nations" was written in 1776. In this period of history there was much
political unrest in England, one such reason was because of the American revolution. The
primary cause behind the revolution was taxing and tariffs on the part of England. This
could be a motive behind Smith's idea that limited if any government control in the
economy would cause economic harmony, opposed to England's strict control.

"The Communist Manifesto" was a pamphlet written by Karl Marx and Friedrich Engels, and
unlike "The Wealth of Nations," this writing completely opposed the idea of a free market
economy and any form of economic competition. The "Communist Manifesto" had a slight
impact when it was first published in 1848, but later it became one of the most
revolutionary declarations in the world and the basis of Marxism. Karl Marx was a German
Continues for 3 more pages >>