Commentary: Capitalism Adam Smith & Karl Marx

The position of the laborer within capitalism is free and suppressed, equal and divisive, sustaining and alienating.  While given the opportunity to interact in the economy and to sustain his life in at least the most basic of ways, the exploitation of the common worker has the tendency to detract from his personal freedom and ability to act for his own benefit.  Philosophers Adam Smith(1) and Karl Marx(2) portray the social position of the wage laborer in two very different lights within their famous works: Smiths’ The Wealth of Nations and Marx’s Estranged Labor as well as The Communist Manifesto, written by Marx in collaboration with Friedrich Engels.  Smith, a capitalist, expounds upon the benefits of the capitalist system and its sustainability due to the nature of individuals to pursue economic transactions that are in their best interest.  In doing so, he fails to isolate and identify the inequality of such a system and the subsequent effects it has upon the lower-class majority. Marx, on the other hand, views capitalism with a more intuitive and skeptical eye.  Though he acknowledges the progress made by capitalism and the opportunity offered by free trade, he clearly illustrates how such a system creates differences that lead to the direct exploitation and alienation of the lower class majority, the proletariat.  The detailed and in-depth manner in which Marx examines the effects of capitalism sheds light upon the negative qualities of such a system in respect to the divisions it creates amongst social classes. Upon reading Marx’s work, it becomes clear that Smith’s narrative of capitalism is lacking in its ability to pinpoint the true divisive and dehumanizing nature capitalism has the tendency to exhibit in society, chiefly because of Smith’s inability to empathize with the common worker.

The natural tendency of individuals to act in their own economic interest is often considered a negative and selfish aspect of the economic system.  However, according to Adam Smith, the dominance of economic self-interest drives the economy and creates a balanced and smoothly flowing system through which commodities and services can be exchanged and obtained.  The true economic goal of an individual is to benefit himself to his maximum ability. His actions and goals are driven by the idea of personal gain, not in terms of the advancement of others. However, to be actively involved and prosperous in the economy, individuals must interact and benefit from one another.  In The Wealth of Nations, Adam Smith describes the economic interactions that occur between people in the market as “give me that which I want and you shall have this which you want” transactions (Smith, 318).  When people involved in a financial deal enter into the agreement with their desires and interests at the forefront of their decision making, each will act to insure personal success and in doing so will obtain their wants.  

Because individuals must interact or work together to be economically successful, the economy is driven and held together by the personal interactions between various consumers and producers alike.  While some ultimately are more successful in terms of finances, as in the case of the businessman and his more menial laborers, each still works with a passion to achieve and maintain a favorable standard of living.  “A man must always live by his work and his wages must at least be sufficient to maintain him…” (Smith, 324).

Smith illustrates capitalism and the division of labor in the workplace and how he believes workers are benefited through such a system through the example of the pin makers.  Each pin maker is uneducated and incapable or scarcely able to make a single pin when alone. However, when the task of pin making is divided amongst several workers in an assembly line type of practice, each can perform one or two small tasks and therefore more pins can be produced faster and more easily.  Therefore, “every workman has a great quantity of his own work to dispose of beyond what he himself has occasion for; and every other workman being exactly in the same situation, he is enabled to exchange a great quantity of his own goods for a great quantity, or, what comes to the same thing, for the price of a great quantity of theirs. He supplies them abundantly with what they have occasion for, and they accommodate him as amply with what he has occasion for, and a general plenty diffuses itself through all the different ranks of the society” (Smith, 317).  

While the role of the worker often facilitates tasks and makes production both faster and cheaper, the effect such menial work has upon individuals is unaddressed by Smith.  The pin makers are fortunate to possess a job and salary, but certainly they cannot obtain maximum satisfaction from such a task. Performing the same routine practices hundreds to thousands of times throughout the workday provides the worker with very little challenge and ability for creativity and diversity in his work.  Smith’s upbeat depiction of such a practice is deceiving. While the task of the worker is beneficial to capitalism itself, the effects it has upon the wage laborer are detrimental to his well-being in the sense that they strip away his humanity and leave him as little more than a machine.

It is the belief of Adam Smith that by acting out of self-interest, individuals keep the economy running in a balanced and reliable manner.  The market runs optimally when individuals are forced to interact out of want of personal gain. When each individual puts the needed effort into succeeding financially, whatever this may mean on each personal level, an “invisible hand” keeps the economy running smoothly.

However, labor, while necessary for the production of goods and services, can be a corrupt and damaging force in a class-based society.  Too often, workers are exploited and even dehumanized by their work for the gain of those above them. According to Karl Marx, through exploitation in the workplace, the laborer “sinks to the level of a commodity and becomes indeed the most wretched of commodities” (Marx, 438).  Marx’s views in regards to the laborer’s place in society, explained in Estranged Labor, and his resulting quality of life portrays the laborer in a very different place than does Adam Smith in his depiction of capitalism.

Unlike Smith, Marx examines the differences that exist between classes with a more detailed and critical perspective.  Ultimately, in Marx’s opinion, society is destined to be divided into two distinct social groupings, the “property-owners and the propertyless workers” (Marx 439).  Because of the proletariat’s exploitation, he has no private property. As Marx claims, the only individuals against the abolishment of private property are the upper class bourgeois, because they are the only ones with private property to lose.  In fact, the proletariat has little to lose.

When proletariat laborers are forced to perform menial tasks for long hours and low pay, they are dehumanized.  A laborer’s work satisfies his need to survive financially by allowing him to minimally obtain the most basic commodities, but he loses himself in the process.  When forced to work, the laborer is estranged from his humanity in the sense that he often does not have the ability to utilize his full talent and personality and also because he is isolated from the world around him and subjected to harsh and demeaning working conditions.  While at work, the worker is not in his natural element and often he acts as a machine rather than a man. Because of this, it is not surprising that such work is detrimental to both his physical and mental well-being. The harder he works, the more he loses himself in his work.  The more he loses himself the worse off he is and the better off the consumers of the upper class can be.

While as Smith suggests, the workers toil does enable him to earn wages, which allow him to interact in the economy and help to drive capitalism, the cost of such a practice is the worker himself.  Alienated from society, he is unable to live to his full potential and becomes a slave. “Not only are they slaves of the bourgeois class, and of the bourgeois State; they are daily and hourly enslaved by the machine, by the overlooker, and, above all, by the individual bourgeois manufacturer himself” (Marx, Engels, 453).  “…The worker becomes a slave of his object, first, in that he receives an object of labour, etc. in that he receives work; and secondly, in that he receives means of subsistence. Therefore, it enables him to exist, first, as a worker; and, second, as a physical subject. The extremity of this bondage is that it is only as a worker that he continues to maintain himself as a physical subject, and that it is only as a physical subject that he is a worker” (Marx, 440).

Because the worker is viewed as little more than a commodity, “the cost of production of a workman is restricted, almost entirely, to the means of subsistence that he requires for maintenance, and for the propagation of his race. But the price of a commodity, and therefore also of labour, is equal to its cost of production. In proportion, therefore, as the repulsiveness of the work increases, the wage decreases” (Marx, 452).  “The modern labourer, on the contrary, instead of rising with the process of industry, sinks deeper and deeper below the conditions of existence of his own class. He becomes a pauper, and pauperism develops more rapidly than population and wealth” (Marx 456).

“The working men have no country”, education is in the hands of the ruling class, and “all family ties among the proletariat are torn asunder, and their children transformed into simple articles of commerce and instruments of labor” (Marx, Engels, 460).  Culture in and of itself is determined by the actions of the bourgeois and is foreign to the proletariat due to the severe differences in lifestyle that exist between them. For this reason, Marx argues, true culture cannot be taken from the proletariat for his culture is simply “a mere training to act as a machine” (Marx, Engels, 459).  Such a subhuman existence scarcely reflects the optimistic success illustrated by Smith. The proletariat works hard, but his interests are not met. He has no opportunity. He is not free.

Smith and Marx are in agreeance over the idea that “No regulation of commerce can increase the quantity of industry in any society beyond what its capital can maintain” (Smith, 325), but each perceives the effects of such a phenomena differently.  Marx associates the decreases in prices with the decline of the status of the proletariat. Because his wage decreases and his working conditions decline, he may not be able to get by. Smith, on the other hand, explains away such an occurrence with the reassurance that the invisible hand will continue to guide the economy and the well-being of society as a whole will be maintained because of self-interest.  Accumulated wealth will continually be distributed to individuals, providing each person with enough resources for survival

Marx’s claims as to the exploitative nature of capitalism are far more convincing than those of Smith.  Throughout history, there have always been distinct class divisions between a wealthy and powerful minority and an impoverished powerless majority.  In 1776 when The Wealth of Nations was published, a wealthy portion of the capitalist population held sway over social and political aims alike.  The same was true in 1849 when The Communist Manifesto was produced, and is still true today.  Marx’s point of view appeals to the modern day reader over that of Smith simply because it has been proven and reproven over the decades and even bares a striking resemblance to the feudal system of the Middle Ages.  Even today, in America, a predominately capitalist nation, political sway in congress is dominated by corporations and wealthy corporate executives rather than commonplace individuals. For example, the corporate executives from the Kraft Corporation have gained political office due to their wealth and influence.  In congress, they then have the ability to facilitate the passing of laws and regulations that benefit their personal corporation rather than the general public, similar to the bourgeois practices illustrated by Marx in The Communist Manifesto.  Corruption is rampant amongst the bourgeois and proletariat.  The proletariat must form a union to rise up and overtake the bourgeois.  Doing so will create a more balanced and equal society, with the standardization of education, elimination of private property, restoration of family ties, and elimination of exploitation for wealth.

The laborer plays a central role in the capitalist system, but the effect such a role has upon him is in need of critical analysis.  While capitalists like Adam Smith can view the position of the commonplace worker as natural and in his own hands due to the free nature of capitalism and the invisible hand that guides the economy, the true exploitation of workers becomes apparent with closer observation and empathy.  Karl Marx accurately describes the alienation of the laborer through exploitation by the wealthy minority in society. Such a phenomenon has occurred throughout history and action needs to be taken by the proletariat in an effort to rise above the oppression and exploitation of a society with deep class divisions.  If such a revolution were to occur, true economic freedom and equity could be reached, creating a society where hard work and acting in one’s own interest could truly bring an individual to the top, no matter who he or she is.

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