Adam Smith’s name manifests itself most profoundly in his own creation, “The wealth of Nations”. His An Inquiry into the Nature and Causes of the Wealth of Nations, published on 9th March 1776, is all about the wealth, Nations have in store and how various economic dimensions of the country or a nation spends and divides the wealth in its social perplextities. Among 18th century philosophers, it was Adam Smith whose impulses gave the way to many new revolutionary and evolutionary approaches to the modern day theorists and gave new shape and ideological perceptions of the Aristotelian era in both sociological and economical spheres. In the following review, I would delve on why The Wealth of Nations has been a very important document for that era and for today also and what importance Communist Manifesto had shown in the society.
The Wealth of Nations is not just a document but in it lays the whole philosophical dimensions within the economy of the nation. The basis of the book lies in the welfare of all. From his work is reflected a deep and intellectual understanding of the real occupations or professions of mankind. This real occupation of the mankind is the inclination towards wealthy possessions and money. His argument is in favor of laissez-faire, free market economy, which means there should be less interference of government in all its economic activities.
1886 saw the emergence of Communist Manifesto written by none other than Karl Marx. At the back drop of the epidemic in Europe in 1848, it was written as an agenda for the Communist league. From its pages, immerse the flow of the Marxists view on the history of economics and society-the history of class struggle. Marx opined that the two classes of society have pitted against each other in every age starting with masters and slaves down to the bourgeoisie and the working class in his own time. One class of the society has always tried to exploit the other class of society, because their interests have always been contradictory, like two opposite poles, standing diametrically apart. As one class attained power in the economy, there would always a way on which the new class would climb subduing the old class. This had happened between the peasant and the nobility, from which emerged merchant and a working class.
Adam Smith, Karl Marx and John Maynard Keynes, the three names representing three corners of the conflicting ideological patterns had stirred the nations with an emblem of atrocities. Communist Manifesto by Karl Marx begins with the sentence, “The history of all hitherto societies has been the history of class struggles,” and in the next 41 pages, it continues with conviction to convolute his proposition-a true statement of the world. In section 1, Marx showed us real picture of the world, how the development activities and the social structure had put an eventual destruction to the bourgeoisie, the dominant class of his day. But even before that the feudalism was prominent. The aristocratic and the corporate leagues were eating all the pies of the National wealth but with discovery of America there arose on the scene a new and fresh, manufacturing class. With new outlook and innovative and revolutionary approach, they controlled the international and domestic trade. Along with the economic growth, they occupied political scenes and gained superiority over the old feudal society.
Marx proclaimed, “The French Revolution was the most decisive instance of this form of bourgeois self-determination and the executive of the modern State is but a committee for managing the common affairs of the whole bourgeoisie.”(Marx, 82) The rise of middle class made way to the labor class, who deprived of the means of production and capital at their disposal, began to sell their labor to make their living. The labor became most crucial factor of production of the bourgeois. The other classes of the society like artisans and small business owners were unable to compete with the bourgeois capitalists and the increase and growth of the bourgeois industries further became the cause for the deteriorated condition of the proletariats. But Marx was optimist, as he said this deteriorating situation of the labor class would enthuse them to give birth to the revolutionary elements, which might further destroy their bourgeois oppressors. “What the bourgeoisie, therefore, produces, above all, is its own grave-diggers. Its fall and the victory of the proletariat are equally inevitable.” (Marx, 94)
In his second chapter, Marx came to his own topic, “For the people and of the People”. He focused on the main ideology of the common people, how Communists wanted to bring about social changes that could benefit proletariats and Marx said that this could be brought about by raising consciousness of proletariats towards their own position in the society. This would in turn bring them to the pinnacle of their struggle spree towards their emancipation. The main objective of communists and revolutionary proletariats was the removal of the system of owning private property through abolition of capitalism. Capitalism was a main culprit for unequal distribution of wealth in the economy and to achieve this goal, there was every need for proletariats to put an end to the basic foundation on which bourgeois culture stood. Proletariats had to themselves stands to bring the condition as Marx said, “An association in which the free development of each is the condition for the development of all.” (Marx, 104)
Criticizing the other movements, Marx said their all emphasis had been on looking at the earlier social movements to redress the problems but they ignored the class conflicts and did not adhere to the violent revolution, which is only the way for final emancipation of the proletariat sufferings. He announced the communist manifesto with an intention to “everywhere support every revolutionary movement against the existing social and political order of things.” (Marx, 120) Marx revoked all his thoughts in conclusion by the following sentence, “Let the ruling classes tremble at a Communistic revolution. The proletarians have nothing to lose but their chains. They have a world to win. Working Men Of All Countries, Unite!” (Marx, 121)
Karl Marx was more of sociologist and looked at the economy of Nation from social perspective whereas, Adam Smith had shown the way to increase the wealth. He gave his ideology looking every aspect by analyzing the economy. He laid emphasis on the division of labor, which plays a very crucial role in exchange. In spite of criticism, his principles follow practical approach. When Adam Smith began his concept to give shape, he was living in Scotland, which was lacking far behind England economically, politically and socially and its trade with England was only minimal. Against this scenario, Adam Smith showed to the world how economy could move on towards the road of economic prosperity, and the only way was through the process of division of labor and exchange. In Book 1, Adam Smith released the power of labor as a key component of the industrial world. He opined that labor specializes in his or her key area of activity and contributes towards the process of manufacturing and helps in the increase in production and meets ever-growing market demands. Along with it, fair wages was a key to success and production.
Besides division of labor, it was value of exchange that needed to be taken account of. Wealth of nations could be increased through market extension, which could be done through exchange and one needed to understand value of exchange and value of labor for this purpose. According to Smith, value of commodities depended on the kind of labor used in its production and how valuable it was to the buyer. He further explained the concept of wages; wages of labor should suffice the level of efforts they put in the production as well as meet their own individual needs. Similarly, he explained the concept of profits, stocks, rent of land as a means to increase earnings for the owners and system of exchange, which would reduce economic disparities among the nations.
In his book 3, Adam Smith specifically mentioned about this concept: how the exchange of goods could reduce the economic imbalance among the nations? He further said that commercial activities at home could not attain that value as could be attained if taken part in exchange and to achieve that aim, need of the hour was to make political reforms providing conducive environment to boost the trade towards profit. He also laid emphasis on mercantile system to give boost to the free trade and this was the main reason why England’s economy began to grow at a rapid pace whereas Scotland’s did not. Those nations could only attain sovereignty that could successfully attain trade alliances with the other nations because through trade alliances only, one could attain success. Lastly, Smith said, concentration of one factor of production at the cost of the other could also lead to the deterioration of social order and the economy as a whole.
In 1776, Adam Smith’s The Wealth of Nations and later The Communist Manifesto by Karl Marx in 1848: these both political and economical ideologies became the landmark and a matter of deep study for many sociologists, philosophers and economists. They from their own perspective forwarded their conception of the welfare state by giving the power to nations. Marx ideology was the ideology and values of whole Communists. He emphasised that through communism and through raising the political consciousness of the labor class only, nation can attain the welfare society. It has been since 150 years since The Communist Manifesto was published but we cannot see predictions in it really taking shape in the any economy of the world. The fall of the Berlin Wall is seen as the victory of capitalism over Soviet-style communism. Within the span of 100 years, the Union of Soviet Socialist Republic was crushed under the heavy weight of bureaucratic domination and the conflict between United States of America and the Soviet Union, known as the Cold War, came to an end. With this, USA emerged as the only superpower of the world.
Smith’s envisioned the free society, but at that time free society was only a dream whereas Marx wrote in the period of Industrial revolution marked by developments, prosperity and whole change in the societal, economical and political set up. Mark himself saw the poor conditions of laborers, whereas the rich were harvesting the pies at the cost of their poor laborers hard work and toil. Though Karl Marx’s theory did not appear practical but remained the most beneficial doctrine but on the same hand Adam Smith’s theory can be seen in all the Industrial set up’s of today’s world too. Adam Smith’s economics has become a lifeline for industries and within its precincts of labor of value; Marx labor of value too stands today as the most important aspect of growth and development. The labor of value means as the amount of the number of hours laborers put into the manufacture of the objects and so the increase in their quality and value.
Both Karl Marx and Adam Smith brought the history alive by their conflicting views and yet ideologically similar and had stirred the emotions of all nations generations ahead.
Marx, Karl. “The Communist Manifesto”. Penguin Classic Edition, 1985.
Smith, Adam. “The Wealth of Nations”. Edited by R.H. Campbell, A.S. Skinner and W.B. Todd. Oxford: Clarendon Press, 1976.