Theories of capitalism

Hugo Panau

Bradley Smith

3VLA5CIV

Synthesis Essay

September, 26

Theories of Capitalism

        The industrial Revolution began in the 18th century, when societies became more industrialized and more urban. It was a long and slow process and it completely transformed an agricultural society into an industrial society, by changing the methods of manufacture, production, and transportation. All of these changes impacted the economic and social situation of the people.
Karl Marx and Adam Smith both wrote during this time period giving birth to the Manifesto of the Communist Party, Karl Marx (1888,ed. By F. engels) and to An Inquiry into the Nature and Causes of the Wealth of Nations, Adam Smith (1776). In his work Marx focuses on class struggles within the society, while Smith is more concerned of establishing the foundation of Liberal economics. If the Industrial Revolution has changed and industrialized societies, leading to an economic growth, it also divided them. It is essential to first explore Adam Smith economic thought to understand the class struggle between the bourgeoisie and the working class and how their relationships evolved according to Marx.

          In his work Adam Smith, explaines the foundations of Liberal economics, describing man as an individual who need the help and the assistance of others but can’t expect to obtain it without something in exchange. In other terms it means “bargain”as Smith says “But man has almost constant occasion for the help of his brethren, and it is vain for him to expect it from their benevolence only.” (Smith, l. 10). In saying that he could introduce his idea of self interest explaining that, “Every man, as long as he does not violate the laws of justice, is left perfectly free to pursue his own interest, his own way, and to bring both his industry and capital into competition with those of any other man. ” (Smith, l. 23). He encourages private industrial owners in order to energize commercial and economic actions. This process of dynamizing the economy will lead to a significant improvement of the conditions of life, that is to say a better standard of living. So every man by being free to pursue his own interest will serve the best interests of the entire society, according to Smith “the duty of superintending the industries of private people, and of directing it towards the employments more suitable to the interests of society.” (Smith, l. 28). However stimulating the economy will not only serve the best interests of everyone, it will also lead to the separation between the bourgeoisie and the working class.

          In the Manifesto of the Communist Party, Marx explaines that always in the history, there was a distinction in the relations between individuals, he mentiones “freeman and slave, patrician and plebian, lord and serf, guild-master and journeyman, in a word oppressor and oppressed,(…)”. (Marx, l. 1). Now putting this concept into the context of the Industrial Revolution, he defines the bourgeoisie as the opressor and the working class or proletarians as the opressed. He claims that “Society as a whole is more and more splitting up into two great hostile camps.” (Marx, l. 6) to highlight the fact that there are two distinct groups with distinct roles. On the one hand there is the bourgeoisie that “has got the upper hand” (Marx, l. 18) leading all the rapid devolepment of the society by creating new industries and taking advantages of the new capitalist system as he demonstrates it, “The need of a constantly expanding market for its products chases the bourgeoisie over the entire surface of the globe (…) all old-established national industries (…) are dislodged by new industries, whose introduction becomes a life and death question for all civilised nations.” (Marx, l. 25). On the other hand there are the proletarians, the people that can’t produce anything by themselves and therefore have to sell their labor power to the bourgeoisie. According to Marx, he describes them as “a class of labourers, who live only so long as they find work, and who find work only so long as their labour increases capital.” (Marx, l. 35). That completely shows a great disparity between these two groups.

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