Adam Smith Adam Smith vs Karl Marxvs Karl Marx

Part onePart one

Adam SmithAdam Smith

Enlighten Thinker Enlighten Thinker 1723-17901723-1790 I hate Mercantilism!I hate Mercantilism!

Enlightenment = Enlightenment = natural natural lawlaw

A.S. was from Scotland and A.S. was from Scotland and wrote at the height of the wrote at the height of the British Empire.British Empire.

Mercantilism Mercantilism was a was a managed economy.managed economy.

The Mother County would The Mother County would tell colonies exactly what to tell colonies exactly what to produce: produce: Raw MaterialsRaw Materials

And also what to consume: And also what to consume: Manufactured productsManufactured products from Englandfrom England

A very sweet deal for A very sweet deal for British manufacturersBritish manufacturers

Mercantilism Mercantilism meant big meant big profitsprofits for them for them

The British The British consumer consumer and and those in the those in the colonies got a colonies got a raw dealraw deal

Nepotism: when you Nepotism: when you favor friends and familyfavor friends and familyAdam Smith was not Adam Smith was not

impressed:impressed:

Mercantilism Mercantilism was was unnaturalunnatural

Time for a Time for a change!change!

Mercantilism Mercantilism was was inefficientinefficient

Laissez-Faire or Laissez-Faire or hands hands off!off!

Print moneyPrint moneyDefendDefend the nation the nationMaintain Maintain

transportationtransportation facilitiesfacilities

Anything else was Anything else was UNNATURAL!UNNATURAL!

Oh no!!! It’s the invisible Oh no!!! It’s the invisible hand of Adam Smith!hand of Adam Smith!

Competition in a free Competition in a free marketmarket

The The MARKETMARKET refers to the refers to the forces of supply forces of supply and demand and demand operating without operating without government government interferenceinterference. .

The Wealth of Nations The Wealth of Nations 17761776

Everyone pursue your Everyone pursue your own interestsown interests

When everyone When everyone pursues their pursues their own interests own interests societysociety benefits benefits

How could this How could this be?????be?????

Consider Bill GatesConsider Bill Gates

Wealth is Wealth is not a finite not a finite resourceresource

Bill Gates founded Bill Gates founded Microsoft, and Microsoft, and 90 90 billion dollarsbillion dollars was was created out of created out of thin thin air.air.

Not only did he make Not only did he make himself rich, but himself rich, but others as well.others as well.

WEALTH IS CREATED!WEALTH IS CREATED!

Survival of the fittest Survival of the fittest economics styleeconomics style

80 years before 80 years before Darwin’s bookDarwin’s book

Adam Smith Adam Smith portrays a world portrays a world similar to similar to Darwin’s natural Darwin’s natural selection.selection.

He believed it He believed it was the natural was the natural order.order.