Marxism and Smiths Theory

Learning about Carl Marx and Adam Smith's theories on how to stabilize the economy and bring the poor to a better standing point tells us a lot on how different our government could be.  In class, we went over Marxism through an activity using Hershey kisses. In the beginning, we were given a few Hershey kisses, but some students got an outrageous amount-almost three times as much as we had!  We then played Rock Paper Scissors, and would give a candy if we lost and get one if we won. The purpose of the lesson was to show how some people will undoubtedly have more candy than the rest of us.  After that, the teacher collected the candy and redistributed it evenly this time.  Students were then told to play again, and this gave everyone an equal chance. However, in the end some students still ended up with more candy than the rest, so the candy was collected and redistributed, but we did not play Rock Paper Scissors. These are called Capitalism, Socialism, and Communism, and for me, the activity was not fun and was frustrating, because I lost my candy immediately and couldn't win as much as I wanted.  Both Marx's theory and Smiths theory are aimed at helping to get the poor better lives and more stable economically, and both attempted to bring equilibrium to the social classes.

Marx's theory was a lot different than Smiths theory, mainly because Marx's theory had three steps to it. First, a country would be Capitalist and big companies would not pay their workers enough. The poor would continue to get poorer while the rich continue to keep getting richer.  Eventually, Marx said that this would lead to a workers revolt, and the government would be overthrown into a socialist society. They would then decide to evenly distribute resources among everyone, making everyone of equal class and opportunity. Eventually, the people would realize that they did not need a government to distribute the resources, and would all agree to share equally, resulting in the disbandment of government leading to pure communism without competition.  Smith, however, said that his theory of the invisible hand would be a much better way of controlling the economy.  He proposed that instead of having the economy be controlled by the government, they should just let people compete against each other.  By allowing this competition, one company selling the same product as another company will sell it at a lower price in order to sell more units, and if they don't then they will not make any money at all.  Eventually, he believed the costs would go low enough so that the poorer people could afford them, which clears up the issue of not having enough money for them.

I feel that Adam Smith's theory is the most effective in a society because it allows freedom of competition and it also allows the poor to eventually be able to afford simple necessities. Though neither are great, this would most likely work best for everyone in the country, as the amount of work people put in would grant them an equal amount of money in most cases, as producers would understand that their workers are consumers as well.  I personally would recommend a type of system where the poor get money loaned from the government, and the wealthier people get allowed to compete against each other to try to make more money.  This would allow the poor people to get enough money to at least get by, and also allow bigger companies to continue distributing products.  There really isn't any fathomable way for a country to be perfect economically, and there is always the poor and the rich. These social classes have been around for thousands of years, yet how come somebody hasn't come up with something more fair for the poor but just as good for the rich?



Video on "the Invisible Hand" idea constructed by Adam Smith