Adam Smith vs Karl Marx
Who’s the man with the
economic plan?
Adam Smith
individuals own the
means of production
(factories, machines,
land) and reinvest
profits as capital to
expand business
Capital – wealth that
is invested in order to
create more wealth
Adam SmithThe Wealth of Nations
Laissez-faire- (let do)
non-interference of
the government in business
HANDS OFF!
Capitalism
Free Market Economy – One in which
consumer choice, the law of supply
and demand and competition drives
companies decisions regarding what
products to produce and the prices of
those products.
Adam Smith
3 Laws
Law of Competition
Law of Self Interest
Law of Supply and Demand
Socialism
a theory or system of social
organization that promotes:
that the community as a whole
should own and control of the means
of production (factories / land)
profits from production should be
divided amongst the community as a
whole
Socialism Continued
Believe capitalist take advantage of
workers
Community or state (gov’t) must act
to protect workers
Unequal distribution of wealth is
unfair (caused by capitalism)
Goods should be divided according to
each person’s needs
Karl Marx and Freidrich Engels
The Communist Manifesto
Haves
Have-nots
Patrician
Plebeian
Noble
Serf
1st & 2nd
Estates
Bourgeoisie
3rd Estate
Proletariat
The New Struggle
Bourgeoisie = owners of business,
capital and means of production
Proletariat = working classes, own
nothing
Karl Marx (and F. Engels)
The Communist Manifesto
Radical Socialism or Marxism
Workers will seize control of the
government and businesses
“Dictatorship of the Proletariat”
Workers would take control of the
government
Then what…
redistribute profits equally
own all property in common (no
private property)
Socialism  Communism
“From each according to his ability,
to each according to his need” (all
must work, all share in profits)
Economic equality (no more classes)
No government or police would be
needed in a community of equals
where all is shared government
would fade away  Communism
“Communist” Countries Today
“Communism” = Dictatorship
never moved passed Marx’s
Dictatorship of the Proletariat stage
Examples
– Former USSR (Soviet Union)
– China
– Cuba
– North Korea
Socialist Countries Today
Tend to be democracies
Major Industries owned by the people
(Railways, Telephones, TV stations etc.)
Government taxes provide benefits to all
citizens (healthcare, free higher education,
pensions (retirement), Social security
Examples:
France, Canada, England
What system would they support?
For the following people decide whether
they would support:
Socialists - All means of production and all
profits are owned by the community
together (Owen, Marx)
Laissez-Faire Capitalism - Government
should keep its hands off business and
allow owners to act in their own self
interest to seek profit (Smith, Malthus and
Ricardo)
Donald Trump
If you don't make
him a profit
“YOU'RE FIRED!”
Robin Hood
Robs from the rich and gives
to the poor (ie redistribution
of wealth).
Papa Smurf
Leads a selfsufficient
community of little
blue people living
in harmony. All
members of the
community work
together to meet
their needs. All
have an equal
share.
Gargamel
He is in constant
pursuit of wealth
and doesn't care
how many little
Smurfs had to die
to make him rich.
In fact he thought
he could turn
Smurfs into
gold...hmmmmm…