Adam  Smith                                                                                                      Karl  Marx      In  1776,  he  published  a  book  called  “An  Inquiry  into  the  Nature  and  Causes  of  the  Wealth  of  Nations.”  It  is  usually  called  “The  Wealth  of  Nations”  for  short.  This  book  covered  in  detail  concepts  of  economic  freedom,  the  role  of  self-­‐interest  and  division  of  labor.  Smith  believed  that  the  success  of  a  country  lied  in  letting  the  members  of  society  develop  their  own  specific  gifts  and  pursue  what  they  liked  doing  and  could  do  well.      He  believed  that  this  freedom  would  result  in  a  great  variety  of  trade  and  the  nation  would  become  wealthy.  He  also  supported  a  “laissez  faire‟  economy,  which  means  that  the  government  or  state  should  interfere  as  little  as  possible  in  the  trading  activities  between  people,  as  that  would  only  harm  trade.      The  expression  “the  invisible  hand”  is  mainly  associated  with  Adam  Smith.  According  to  Smith,  in  a  “laissez  faire‟  economy,  each  member  will  try  to  pursue  and  maximize  his  own  self-­‐interest.  It  is  the  interaction  and  exchange  between  the  different  members  in  terms  of  goods  and  services  traded  that  will  make  each  member  better  off  than  simply  producing  for  himself.  He  believed  that  in  a  free  market,  no  kind  of  regulation  would  be  needed  to  ensure  that  a  mutually  beneficial  exchange  of  goods  and  services  took  place,  because  this  "invisible  hand"  would  guide  the  different  members  to  trade  in  the  most  mutually  beneficial  way.                            

Karl  Marx  and  Friedrich  Engels  published  the  Communist  Manifesto  in  1848  in  hope  of  a  social  revolution.  In  it,  they  explained  their  view  of  history  so  far  and  also  explained  what  they  thought  should  happen  next.    Marx's  view  of  history  is  summed  up  in  the  first  line  of  his  manifesto.  He  said,  "The  history  of  all  hitherto  existing  society  is  the  history  of  class  struggle."  Marx  explained  that  he  saw  history  as  a  series  of  struggles  between  two  groups  -­‐  the  bourgeoisie,  or  the  people  who  owned  the  land  and  money,  and  the  proletariat,  or  the  oppressed  workers.  He  saw  history  as  progressing  through  three  stages.  First,  there  was  capitalism.  Next,  he  said,  would  come  socialism,  and  then,  finally,  communism.  He  described  communism  as  a  classless  society.    They  thought  that  capitalism  would  sooner  or  later  collapse.  He  predicted  that  workers  would  one  day  unite  to  overthrow  capitalism  and  bring  about  a  better  society,  which  would  be  run  on  Communist  principles.    He  talked  about  the  means  of  production  which  were  the  basic  elements  needed  to  produce  goods.  These,  he  said,  included  land,  natural  resources,  and  technology.  He  felt  that  it  was  important  for  all  workers  to  have  a  share  in  the  ownership  of  these  means  of  production.      Groups  of  young  radicals  adopted  his  ideas;  they  called  Marx  the  father  of  Communism.  They  became  followers  of  Marx  and  Engels'  most  famous  piece  of  writing,  The  Communist  Manifesto.    Marx's  followers  called  their  new  philosophy  "Marxism."  

Karl  Marx  

Adam  Smith