Smith And Marx On Capitalism

Moreno 1

Jared Moreno 20 October 2009 Bill Jones Two Views on the Industrial Revolution The Industrial Revolution and the new economic system, capitalism, changed everything from previous epochs. The way people produced, the way people survived, the way people lived and the ideas that people had were completely revolutionized in an extremely short period of time. Both Adam Smith and Karl Marx observed this new system. Adam Smith wrote about this system as it started and Karl Marx a hundred years after once the consequences were revealed. Adam Smith brought the idea of capitalism into being with his book Wealth of Nations. Karl Marx critically critiqued this new system in his pamphlet called “The Communist Manifesto.” The debate between the two philosopher's ideas continues long after their deaths. There would have to be conditions met for the Industrial Revolution and the new economic system to be established. There needed to be large populations living in centralized areas, so they could work in factories. A problem with this was that the majority of people lived out in the farmlands living as peasants. They worked in agriculture, so they could feed themselves and their families. Technology and changes in how agriculture was handled helped liberate people from this laborious task of farming. With the level of food production increasing and because of advances in agriculture, less people were needed to work as farmers. Therefore, farmland became concentrated among a few large landowners and the rest of the people moved to urbanize cities to find new ways of living. These people became the first workers in a new kind of society advanced in technology and production.

Moreno 2

What encouraged the Industrial Revolution more than the advances in agriculture was the improvement in technology. It was the change in technology which greatly contributed to the increase of production. New technological advancements made factory work and production faster. Technology also helped the transportation of products and resources. Some of the earliest inventions took place in Britain. The first inventions were used to increase cotton textile production. The Flying Shuttle was invented in 1733 and the Spinning Jenny in 1764. Along with these inventions, Strayer stated how “the great breakthrough was the steam engine, which provided an inanimate and almost limitless source of power beyond that of wind, water, or muscle and could be used to drive any number of machines as well as locomotives and oceangoing ships.”1 Combined with the invention of steel, railroads and steamships provided a fast transportation of goods and resources. Inventions also helped the extraction of resources such as iron and coal. In every area of life, technology greatly improved the production capabilities of Europe, especially Britain, at the start of the Industrial Revolution. Another step in improving production beyond the advancement in technology was Adam Smith’s ideas on the division of labor. Smith describes about how this new style of production when he says “the greatest improvement in the productive powers of labour, and the greater part of the skill, dexterity, and judgment with which it is anywhere directed, or applied, seem to have been the effects of the division of labour.”2 The division of labor was the assigning of specific tasks in the development of a product to one person instead of that one person making the entire product. To make a product today, it goes through an assembly line where every worker 1 Robert W. Strayer Ways of the World A Brief Global History (Bedford/St. Martin's, 2009) 528. 2 Adam Smith “From the Wealth of Nations” in Worlds of History A Comparative Reader, 3rd Ed., Kevin Reilly (Bedford/St. Martin's, 2007) 235.

Moreno 3

contributes to a specific job in building that product. It takes more than one person doing a repetitive task to make a shoe today. This division speeds the time of production because the worker does not waste time switching from one task to another. As well, each worker becomes exceptionally good at doing one specific task, over and over again, without tiring. Division of labor successfully made workers far more productive than at any other time in history. As well as the concept of division of labor, Smith created the idea of the “Invisible Hand.” When comparing importation of products from foreign countries in contrast to producing the same products within the country, Smith said: He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, . . . led by an invisible hand to promote an end which was no part of his intention.3 According to Smith, those who could produce goods within their own country could better their wealth by seeking their interests, but they also promoted the interests of the rest of their country and all the people who lived there, even unknowingly to the producer. With the assistace of the invisible hand, they were able to promote the wealth of everyone because they promoted their own interests. Although it almost seemed like the ideal world of Smith was coming true, this new system left many people behind. His ideas encouraged new levels of production far greater than any previous system. The wealth of the world was increasing rapidly. Instead of all this wealth 3 Adam Smith “From the Wealth of Nations” in Worlds of History A Comparative Reader, 3rd Ed., Kevin Reilly (Bedford/St. Martin's, 2007) 239

Moreno 4

falling to the majority of people, the wealth became concentrated in only a few hands of society. The increased in wealth divides the world into two social classes. The consequences of this system increasingly became revealed about seventy-five years after Smith in Karl Marx and Frederick Engels' pamphlet, “The Communist Manifesto.“ Karl Marx wrote about capitalism, the problems it created, and the new class of workers living in it. These people lived in high density areas in which terrible diseases killed many. They worked nearly the entire day in horrible conditions. The water systems were poisoned with pollution. In a cartoon in Strayer, for example, death is seen giving water from a polluted public well to a poor family.4 A capitalist at the time might have asked, “Why waste money and temporarily stop production to create healthy sewer system for the poor laborers?” Children even had to work with their parents at the age of five. The new economic system did not seem to be bringing a better life for a large population, unlike what Smith predicted. The poverty that labor workers endeared was created because they were hired in a wage system. Marx observed that the wage system had effectively increased the profits of the rich through the exploitation of the poor. Marx stated that the worker: becomes an appendage of the machine, and it is only the most simple, most monotonous, and most easily acquired knack, that is required of him. Hence, the cost of production for a workman is restricted, almost entirely, to the means of subsistence that he requires for his maintenance, and for the propagation of his race.5 The wage given to the workers were not the entire profit gained for the amount they had

4 “The Urban Poor of Industrial Revolution” The Granger Collection, New York in Robert W. Strayer Ways of the World A Brief Global History (Bedford/St. Martin's, 2009) 538 5 Karl Marx The Communist Manifesto (International Publishers Co., Inc. 1948) 16.

Moreno 5

produced. The workers were given only the bare minimum wage for their survival. The rest of the profit was kept for the employer. The employer took profit from every worker. This exploitation created a large division in the wealth of the workers and the employers who hired them. Over the entire society, the wealth was kept for a small group of people. This separation of employer and worker divided people into two classes, the bourgeoisie and the proletariat. The bourgeoisie were those who owned the means of production, the rich capitalist class. The proletarians were the urban wage workers who often worked in the factories for the bourgeoisie. These two classes represented the oppressors and the oppressed. The bourgeoisie exploited the proletariat for their own profit and wealth. In the invisible hand, Smith stated that it would be in the best interests of the bourgeoisie to seek the interests of the rest of society. What bourgeoisie saw in their best interests was, however, to increase their wealth as much as possible at the expense of the rest of society. Through exploitation, the wealth of the capitalist increased, which allowed them to invest so much in industry that production had increased beyond the rate that society could consume. Society faced a situation unlike any time in history; there was too much production. There was too much food to be consumed and too many houses for people to buy or live in. Marx said that society: has conjured up such gigantic means of production and of exchange, is like the sorcerer who is no longer able to control the powers of the nether world whom he has called up by his spells. . . In these crises there breaks out an epidemic that, in all earlier epochs, would have seemed an absurdity –the epidemic of over-production.6 Over-production placed the entire economic system into a crisis. How could the economic 6 Ibid., 14-15.

Moreno 6

system grow if there was no longer a market for the products being made? According to Marx, to recover the economic system, the means of production must be destroyed, new markets created, and increased exploitation of old markets.7 One of the methods used for recovery was that of the destruction of the means of production. The economic system needed to stop producing. In this period, factories could be shut down or even destroyed and products would be thrown away. Marx states that the workers were “a class of laborers, who live only so long as they find work, and who find work only so long as their labor increases capital.”8 Once capital could no longer be increased because of overproduction, laborers lost their jobs. They were left to starve to death despite the fact that there was too much food. Despite the crisis of over-production, one thing that both Smith and Marx agreed on was that the increase of industry and technology would benefit the life of all people. They saw that this new world of production would solve the many problems of the past such as disease, starvation, and more. They also saw that technology would release the restraints of work from people, and that people would be able to have more free time to do the things they desired. Capitalism, they thought, would benefit the majority of the people. Unlike Smith, Marx believed that the proletariat would have to struggle with the bourgeoisie before the benefits of capitalism would actually reach them. Smith did not realize that the two classes would develop into two separate classes. The two classes were opposing forces that stayed in constant strife. As Marx and Engels was writing and publishing The Communist Manifesto, the working class was rising up and demanding a better life. The 7 Ibid., 15. 8 Ibid.

Moreno 7

revolution that Marx predicted seemed possible. He saw that capitalism would be turned into a democratic force the workers controlled for their own benefit instead of the for the benefit of the bourgeoisie. Many workers movements were derived from the ideas of Marx as seen in the “mounting wave of strikes from 1910 to 1913 testified to the intensity of class conflict,”9 as Strayer described them. Instead of revolution, history demonstrated that the capitalist class was not so easily overthrown. The uprisings of the proletariat were smashed, but because they agglomerated into a collective struggle, they were able increase their benefits and improve their working and living conditions. Through their struggles, workers of all societies had some victories, which included an end of child labor, universal suffrage, eight hour work days, and much more. The world we live in has been pushed to the edge of resources. For the first time, the actually possibility of the end of human life is within our horizons. The speed in which capitalism produces has left the Earth with such a toll that it is now possible to conjure the idea that we may not be here much longer. The environmental crisis we have created can end all human life. To me it seems that we must either move on to a world where we not only stop the damage we are doing to the Earth, but we figure out ways of reversing it as fast as possible. Capitalism is a machine stripping the Earth of everything we need; however, we can use this machine for the purpose of replenishing the Earth. We must come together in using the industrial machine in helping the Earth and all life on it. Otherwise, it might have been better if we never had the Industrial Revolution.

9 Robert W. Strayer Ways of the World A Brief Global History (Bedford/St. Martin's, 2009) 540.

Moreno 8

Work Cited 1. Strayer, Robert W. Ways of the World A Brief Global History 528. Bedford/St. Martin's, 2009. 2. Smith Adam “From the Wealth of Nations,” in Worlds of History A Comparative Reader, 3rd Ed., Kevin Reilly 235. Bedford/St. Martin's, 2007. 3. Ibid., 239. 4. “The Urban Poor of Industrial Revolution,” The Granger Collection, New York in Robert W. Strayer, Ways of the World A Brief Global History 538. Bedford/St. Martin's, 2009. 5. Marx, Karl, The Communist Manifesto 16. International Publishers Co., Inc. 1948. 6. Ibid., 14-15. 7. Ibid., 15 8. Ibid., 9. Strayer, Robert W., Ways of the World A Brief Global History 540. Bedford/St. Martin's, 2009.