Karl Marx > Adam Smith

Pro provided a broad overview of both political economic thinkers, although by all accounts it is partial and incredibly simplistic and does not delve into the complexities and nuances that have elevated and allowed both men to endure for more than a century as great modern thinkers. Con will only address the Smith for the moment, although the Marx argument could be more interesting than the initial case presented. I will paraphrase and parse the arguments made by Pro against the legacy of Smith (and please if my paraphrases are inaccurate please demonstrate where and how I did so in the next round). Pro arguments thus far boil down to the following: Argument 1 is given a through rebuttal in Con’s arguments; Argument 2 is rebutted following the paraphrase. 1. Smith lacked an authentic connection what we might conceive of as modernity, monopolies were not prevalent for Smith to anticipate changes including the erosion of mercantilism. And the “invisible hand is not real unless you assume that all people are ignorant,” is a statement I would include in this section but frankly do not understand what Pro means by this. He can clarify in the subsequent round. Smith was naive about the nature of man, and therefore was susceptible to the creation of impractical economic theory. 2. Pro makes a couple of other points that I will note. They are not relevant or historically accurate, therefore do not require a rebuttal. Pro states Smith reacted harshly to mercantilist policies administered by his ministers and advisers. Also, there are some superfluous and extraneous comments that indicate Smith should be held to a lower standard because in the words of pro “Adam Smith never inspired any nation to have a violent overthrow.” Argument three in my estimation is not a serious argument unless inspiring “a violent overthrow” of a country to establish the USSR or Mao’s China is a value. This is the antithesis of value itself. Moreover, Pro comments led one to infer that Smith espoused a radical doctrine intended to overthrow governments. Obviously, whatever construction of Smith Pro appears to be erecting is as solid as a Potemkin village. Con rebuttal & arguments1. Smith as a great forecaster of large economic trends (hopefully the actual writing of Smith will provide a more accurate picture than that provided by Pro): Not only did Smith foresee the slow erosion of mercantilism, but also he was very critical of incorporation and the corporation as an economic entity. In Wealth of Nations Smith already noted the contradictions and ambiguity—even pointed out its clear lack of fiduciary responsibility inherent to its structure. Smith says of the corporate form: “The directors of such companies, however, being the managers rather of other people’s money than their own, it cannot well be expected that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own.”[1] Smith added, “[n]egligence and profusion, therefore, must always prevail, more or less in the management of the affairs of such a company.”[2] Surely, this alone debunks and refutes by way of Smith himself the majority of Pro’s arguments, specifically arguments one and two. However, since I used two long quotations from Smith, I should explain the point I want people to discern. Unlike the characterization of Smith as unaware or disconnected from the reality of greed or how economic systems are often replete with the worst forms of greed and reckless quiddity, he realized and expressed his fear it would develop even worse when if there was a transformation from a partnership (the dominant form) to the corporate form (slowly developed alongside the Industrial Revolution in the nineteenth century) because the corporate form gave men the power to guard the money of others and do with it what they pleased. He thought the inevitable result was fraud, financial speculation, and lack of responsible for one’s business decisions. 2. Argument Two: Smith provided a more valuable economic theory than Marx and may have been more cynical than Marx if not as critical concerning the contradictions embodied in capitalism. Question: What did Adam Smith believe history reveals about the economy, especially those empowered with wealth and political influence? I will let Smith speak for Smith: Answer: “All for ourselves, and nothing for other people, seems, in every age of the world, to have been the vile maxim of the masters of mankind.”[3] I just wanted to clarify what Adam Smith believed and actual wrote about in Wealth of Nations. 3. Argument Three: Invisible hand—rarely do people read Smith’s single passage about the invisible hand, so let heretofore comments stand as both a defense of Smith and function as a way to solve a personal frustration with people that use “invisible hand” and then inaccurately pontificate about Smith’s theories One of the problems with Smith is that no one actual reads Smith, either they worship it or ridicule Smith without taking the painstaking effort to actual read the book in its totality. The most pervasive abuse of Smith’s work derives from quotes about “the invisible hand.” Most people have a conception of it without actually reading the one passage where the he uses the phrase. The context, while overlooked, illuminates the intellectual depth of Smith, but also one shortcoming. When Smith talks about the invisible hand, it essentially highlights the flaws of modern neo-liberal economic doctrine. Adam Smith was concerned that if there was free movement of capital and free imports of goods then Britain will suffer because British capitalist will invest abroad, they will import from abroad, and such a system would hurt the economy. Then he gave an argument (and here let me say this is where Smith’s invisible hand argument fails): Smith says this will not occur because English capitalists will prefer England because of a home biases and there as if by an invisible hand England will be save from free capital movement and free imports. There are other interesting directions yet to go but I will save them for the next round. [1] Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations.. Book V, ch1 paragraph 107 [2] Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations Book V, ch1 paragraph 107 [3] Chapter IV, p. 448. (or http://en.wikiquote.org...