Smith and Marx Document Analysis - Essay Example

?Karl Marx and Friedrich Engels' “The Communist Manifesto” (1848) vs Adam Smith’s “The Wealth of Nations” (1776) The Communist Manifesto (1848) by Karl Marx and The Wealth of Nations (1776) by Adam Smith are documents which make a stand of diverging principles and ideals. The Manifesto sets down the tenets of Communism whereas The Wealth of Nations bases its ideas on Democracy. The Manifesto has its background in the industrialization era; the Wealth of Nations is embedded in the enlightenment/ American independence period. The similarities of both documents are that they both broach the subjects of economics, politics and labor. Their polar differences are based on economic purpose, interest, time period, structure and consequence. In all, Communism and Capitalism are two widely differing modern economic theories which seek to develop the interest of either business owner or employee, oppressor or oppressed. The Communist Manifesto (1848) clearly articulates the fundamental tenets of Marxist Communism, expounding on historic class struggles, revolutions, counter-revolutions and inequality in the world of work and politics. The writing of the manifesto falls in line with the time of the Industrial Revolution and Slaver. The manifesto outlines the role of economics in defining and degrading human relationships. Marx and Engels take a critical look at their society and observe the flourishing industrialization and the rapidly developing urbanization. Boyer reinforces that in Marx and Engels’ era, “the bourgeoisie brought about the industrial revolution…created enormous cities, centralized the means of production and created a world market for its products1.” These movements provoke drastic change in economics and labor to the point that workers interests’ become trampled underfoot. People prostitute themselves in the labor market, “selling themselves piecemeal” (The Communist Manifesto) to earn a livelihood, while business owners profiteer on the backs of the poor. Marx employs the technique of tracing the past, evaluating the present and determining the future of both Communism and laissez-faire Capitalism. The Wealth of Nations (1776) composed by Adam Smith is a historical text which advances the idea of capitalism. Capitalism sets the foundation for America’s government and economy. Adam Smith’s view is to encourage a liberalization of the world market with no barriers to trade. Smith lives and writes The Enlightenment period of world history during which the light of reason shines. Revolutions are being kindled; old social orders are being done away and free-thinkers emerge with new perspectives. Regimes such as aristocracy, monarchy and feudalism begin to experience the action of undermining and another group is surging into power, the nouveau-riches – a people who earn fortunes from industry. Absolute control is no longer pleasing to the enlightened ear. Instead, independence obtains wide currency. According to the Communist Manifesto, the essence of history comprises of class struggle. Marx and Engels commence with the statement that "the history of all hitherto existing societies is the history of class struggles." The Marxist document launches into a narrative explaining that from the dawn of Greco-Roman civilization to the time of the manifesto’s publication, history has its roots deep in the conflict of dual ideologies and polar opposite groups. One dominant camp, “the oppressor,” seeks to retain a monopoly on wealth and power; whereas the recessive consisting of “the oppressed” serves to fulfill the interests of the powerful. The divergence of ideas engenders both overt and subtle war between ruling and servant classes. Again, Marx and Engels reiterate that “the history of all past society has consisted in the development of class antagonisms” (The Communist Manifesto). The pyramidal structure or gradation of society remains as a threat to harmony among social classes. From antiquity to modernity, the dichotomous conflict with respect to class struggle would endure. This conclusion is based on the cyclical pattern of history – the tendency of historical repetition. In the world of politics and economics, the strife for power subsists. “Class antagonisms” and “gradation of social rank” (The Communist Manifesto) still persisted in Marx’s society as they do in the contemporary one. Inevitably, there would be a stratification of groups and class struggle. Although many of the former social and governmental systems have disappeared such as slavery, feudalism, monarchy and social orders, remnants of elitism and class discrimination thrive and proliferate. Social tiers resurface in the basic social rungs: the wealthy and the working poor. Class distinctions arise in numerous forms contingent upon country and history, however, as the international community grows and merges, social class begin to be similar worldwide. As Marx states, although old hierarchies have dissolved, their remnants never die and a friction-filled, demeaning relationship between two parties always comes about. Marx affirms in The Communist Manifesto that modern industry devalues occupations and people. Not only does industry degrade, but it also commodifies for marketing purposes. Humans are only validated as it relates to production and sustainability of a business initiative. The industrialization of Marx’s day removes the sanctity of certain things, replacing it with a dollar value. The baneful consequence of industry then is the conversion of people, the most precious resource, into “units of production” and “wage workers.” The world becomes one filled with commercial products, instruments of labor and images, rather than one with inherent and intangible value. In society, nothing is sacred anymore. Debord confirms this observation pointing out that the commodity fetish is a principle of capitalism in which “all are instruments of labor, more or less expensive to use.2” The goals of Communism are both to act on behalf and in the power of the proletariat and to rise in resistance to the interests of the bourgeoisie. Conforming to Marx’s definition, the proletariat is that class of workers which must work daily to survive. In contrast, the bourgeoisie is a more elite and wealthy group which has acquired affluence and power through business ownership and venture. “Masses of laborers” (Communist Manifesto) constitute the proletariat whose numbers inflate with the size of businesses. Communism opposes the bourgeoisie to seek redress for the wrongs perpetrated against laborers and to overthrow the yoke of the oppressive bourgeoisie. Communism remains resistant to the policies embraced by democracy. Marx sees that the unification of all proletarians is the only means by which all these aims can be effected. Contrary to Communism which purposes to work for the benefit of the masses, (the proletariat/ the lower classes), capitalism clings to self interest. The communist idea of working towards a common good is diametrically opposed to capitalism and Smith himself declares that he has “never known much good done by those who affected to trade for the public good” (The Wealth of Nations) A critic also called Smith3 comments that Adam Smith exemplified “non-cooperative behavior (which)…maximizes the gains from exchange, the basis of specialization and wealth creation and cooperative behavior which is based on reciprocity” (Smith 1). Put differently, the business man espouses both self-interest and exchange in order to further his own goals. The driving force behind establishing a business is not for the common good or the public good but for self-interest. The capitalist entrepreneur embarks on an undertaking with his vested interests to yield a lucrative profit. Because a business requires a capital to start up, capitalism is so called because the essence of an economy is founded on capital to grow and the main objective of any business is to accumulate more money to the capital. Smith confirms this capitalistic goal since it is every individual seeks “to find out the most advantageous employment for whatever capital he can command… he intends only his own gain” (The Wealth of Nations). To justify self-interest, Smith introduces claims in The Wealth of Nations, stating that private business although stimulated by self-interest will still redound to society’s benefit. In other words, the relationship between business owner and the stakeholding society would be mutually beneficial. Smith asserts that when the entrepreneur pursues “his own interest, he frequently promotes that of the society more effectually” (The Wealth of Nations). Therefore, the action of the one directly impacts the other. On one hand, the business owners or bourgeoisie provides goods or a service to a clientele; and on the other, customers patronize the business owner by their transactions. Another advantage inherent in a business enterprise is labor. Indeed, Marx even concurs in the construction of the symbiotic relationship when he observes that “in proportion as the bourgeoisie, i.e., capital, is developed, in the same proportion is the proletariat, the modern working class, developed” (The Communist Manifesto). The labor force for the business is drawn from the local society; therefore, the society gains employment, as the business prospers. Nevertheless, both Smith and Marx know that the utilization of the wider society is only a means to accomplish the egocentric ends of the private business owner. Underlying the self-interested business is the concept of privatization. Privatization is rendering the ownership of a business into the hands of private citizens instead of the government. Smith refers to business owners in his thesis as “private people” thus advocating privatization because citizens have the right to enter a business venture and earn money. His desire is to take away some of the economic power from government and endow this same power to private citizens. Ultimately, the empowerment of the enterprising private peoples leads to the rise of a class which would come to oppress - the bourgeoisie. The Communist Manifesto antagonizes the bourgeoisie because this group has exploited its economic power, trampling the rights of workers. The industrial revolution and its impact on the proletarian and bourgeoisie classes are undisputed as proletarians are converted into machines in the service of their natural superiors - the bourgeoisie. True to its word, the bourgeoisie have capitalized on capitalism, resulting in the exploitation and oppression of the proletariat – it reduces the status of man as a thing, a mere appendage contracted to labor. Self-interest, greed and selfishness of the bourgeoisie fuels this exploitation en masse and oppression of the majority by the few powerful ones. The bourgeoisie takes advantage of resources through monopolization. Therefore we have the wealth of a nation circulating only in the hands of a minority. Marx observes “concentrated property in a few hands” (The Communist Manifesto). As the bourgeoisie exploits man, he rapes natural resources and deprives the larger population of its benefits. In the end, the bourgeoisie prevails, harvesting abundant gains; while low-class, low-income workers suffer. Communism scorns the demeaning status to which man has been reduced. In particular, Marx scorns the bourgeoisie and the baneful effect of ruining a people by their ambitious devices. To stem the power of the bourgeoisie, one of the ways Marx considers is trade unionism. Smith argues for the doing away of the monopolized domestic market in favor of extended foreign trade. He claims that “to give the monopoly of the home market to the produce of domestic industry… must in almost all cases be either a useless or a hurtful regulation” (The Wealth of Nations). Asserting that while every country would have a particular merchandise to sell its local customers, it cannot manufacture everything. This insufficiency necessitates internationalized trade in which the country finds recourse to foreign markets where goods would have better quality and may even be cheaper. The main concern of Smith is to provide access to foreign markets in which one can take advantage of the cheaper commodities (labor included) and wield them for profit. The widening of the domestic markets to include international ones, in Smith’s view, would confirm the ethic of freedom. The restraint which government imposes on the domestic market, tacitly supports monopoly. Smith compares these domestic barriers as “useless or hurtful regulation” (The Wealth of Nations) which only prevents the home market from getting all of its needs supplied. Also, Smith likens monopoly to a dictatorship. In his view, it is unjust to local customers who want wider selections of goods and better bargains. Even Marx foreshadows the effect of globalization and foresees the hazards inflicted upon laborers as a consequence. The internationalized economy would only “open up fresh ground for the rising bourgeoisie… the East-Indian and Chinese markets, the colonisation of America, trade with the colonies… (stimulating) a rapid development” (The Communist Manifesto). Expansion of markets and the elimination of protective barriers would negatively expose laborers to competition and corruption – only one party is privileged, only one party gains an advantage. The bourgeoisie/capitalists relish this open market without external interference. Capitalists agree with free trade, which is a new genre of laissez-faire economics where the State may not interpose or intervene in the economic life of its citizenry. Smith outright maintains that the private entrepreneur “can in his local situation judge much better than any statesman or lawgiver can do for him. The statesman, who should attempt to direct private people in what manner they ought to employ their capitals, would not only load himself with a most unnecessary attention” (The Wealth of Nations). Here, Smith advances the right of non-interference of the State in matters of private business. He is against regulated commerce and the meddling of the government because he knows that government’s interference would work contrary to the private owners’ interests. The watchwords of a private business are economic viability and cost-efficiency. Smith’s reasoning is termed laissez-faire liberalism which dictates and demands the non-interference of the State as advocated in the ideals of liberty. In sum, equality and social justice become the elusive goals in the Communist Manifesto while The Wealth of Nations promotes avarice, self-interested venture and cut-throat enterprise. Both documents collide with one another in principle and in practice. Marx and Engel’s The Communist Manifesto anticipates the take-over of capitalism, current recessive economy and prefigures the dominance of mega multi-national companies. After their era, rapid industrialization continues along with liberalization, privatization and de-humanized commerce. Economies become recessive and crumble because of systematic oppression. Democratic freedom ironically opens the door to tyranny in the business and political worlds. In the end, lofty ideals get eroded to commercialized concepts and capitalistic relationships. Works Cited: Boyer, G.R. “The Historical Background of the Communist Manifesto,” The Journal of Economic Perspectives, 12(4), 1998. 151-174. Accessed 08 December, 2011. Debord, G. K. Knabb. Society of the Spectacle, Aldgate Press, London, United Kingdom, 1983. Smith, A. An Inquiry into the Nature and Causes of the Wealth of Nations, Mobile Reference, Edinburgh, 2010. Smith, V.L. “The Two Faces of Adam Smith,” Southern Economic Journal, 65(1), 1998. 1-19. . Accessed 08 December 2011 Marx, K. F. Engels. The Communist Manifesto: A Modern Edition. Verso, London, 1998. Read More