Karl marx vs adam smith communism vs capitalism worksheet

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The first duty of the sovereign [government] is protecting the society from the violence and invasion of other independent societies by means of a military force...The second duty of the sovereign [government] is protecting every member of the society from the injustice or oppression of every other member of it...The third and last duty of the sovereign [government] is that of creating and maintaining those public institutions and those public works, which though they may be in the highest degree advantageous to a great society, are, however,of such a nature, that the profit could never repay the expense to any individual, or small number of individuals; and which it, therefore, cannot be expected that any individual, or small number of individuals, should erect or maintain (fire departments,police, the post office, building roads and bridges and tunnels).Adam Smith (1723-1790) Laissez-faire capitalismAdam Smith wrote The Wealth of Nationsin 1776. He is known as “the father of capitalism”. Smith felt that capitalismwas the best economicsystem because everyone followstheir self-interest –choosing their jobs, which products they buy, and how to run their own businesses.He agreed with the theory of laissez-faire. Laissez-fairemeans that the government should not make regulations (laws) for how businesses treat workers or make goods. Smith thought that if capitalism caused problems, they would be fixed by supply and demand. For example:ProblemCapitalist solutionConsumers demand a product that does not exist A capitalist will open a business to make that product A business sells a product that makes consumers sick or hurtConsumers will stop buying the product, and the business will lose money and be forced to fix the problemA business pays low wages and workers don’t have enough moneyWorkers will quit that job and find a business that does pay them higher wages, so the first business will be forced to change in order to have enough workersWorkers get hurt by machines in a factory The capitalist who owns the business will lose money since his workers are hurt and cannot work, so he will decide to make it saferAdam Smith thought that government should only be responsible for the following things: Source: Adam Smith. The Wealth of Nations. 1776 (adapted)But Adam Smith died in 1790. He did not see many of thenegativeeffects that resulted because ofthe Industrial Revolution throughextreme crowding in cities (urbanization), pollutioninthe airor water, child labor, and piles of waste or garbage. Many people today use Adam Smith’s ideas to prove that the government should lower taxes and not pay for public services, not pay for any welfare, and have fewer rules for businesses because all those rules make it hard to run a business.

Karl Marx (1818-1883)Socialism/CommunismKarl Marx wrote The Communist Manifesto (with Friedrich Engels) and Das Capital(by himself). He criticized capitalismbecause it allowed the rich to harm the poor. He called the rich the bourgeoisie and he called the lower classed the proletariat. He also used the terms “haves” and “have-nots” for the rich and the poor. The bourgeoisieharmed the proletariatin many ways:●Businesses don’t pay workers enough money. They often replace workers with machines. They have unsafe factories, because safety features cost a lot of money. ●Businesses create products that consumers don’t need, but consumers still buy them and waste their money. “In place of the old wants, that were supported by the production of your town, we find new wants, that require products from distant lands and climates.”–Karl Marx. Das Capital, 1867 (adapted)●Businesses force workers to move to neighborhoods and cities that become so crowded that people are living in horrible conditions:“As a result of capitalism, the housing of an industrial town may today be ok, but tomorrow could be horrible. Laborers live everywhere, even basements and attics,and they become degraded, they get sick, and they die because of their housing.” –Karl Marx. Das Capital, 1867 (adapted)●Businesses put garbage and waste from factories into the land, rivers, and oceans because it’s cheaper than paying to recycle garbage or make a factory cleaner.“Capitalism changes the interaction between man and the earth, because the elements we extract from the earth are never returned to the soil; so capitalism encourages man to destroy the earth so that it cannot continue to survive” –Karl Marx, Das Capital, 1867 (adapted)Marx thought that the best economic system was called “socialism” where the government makes laws to control businesses and stop them from hurting workers and consumers. In socialism, the government also helps unemployed and poor people with welfare and medical care. Marx believed that laws for businesses were necessary to prevent big crashes and recessions and also take care of people who were harmed by businesses by giving them welfare.Marx believed that socialismwould eventually develop into an economy called communism when theproletariat (workers) united to overthrow the bourgeoisie and control the economy themselves through their government. In a communisteconomy, the government would:1)Own all the land and rentit to individuals2)Charge higher taxes if you’re rich and less taxes if you’re poor3)Take people’s money when they die so they can’t give it to their children4)Take people’s property if they move out of the country or rebel against the government5)Be the only bank, so people and businesses have to borrow from the government6)Control all the transportation (railroads) and communication (post offices) in the nation7)Ownmany of the factories and makelaws for how farmers should grow food8)Make laws that protect everyone equally in their jobs9)Force people to move so they are not crowded into cities10)Provide free public education to all children and not allow child labor