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Chapter Questions

From two central documents of the 19th century, Adam SmithÆs The Wealth of Nations and Karl MarxÆs Communist Manifesto, the historian can learn much. In these works, each author discusses the impact of industrial capitalism on individuals and society in a very different way. Smith argued the division of labor required for capitalism naturally lent itself to the rise of social classes and class stratification. Marx maintained that capitalism imprisons the working class, keeps them from rising to ownership class and, ultimately, this inequity is only restored through revolution. SmithÆs position regarding capitalism is that capitalism encourages the motivated and ambitious and the talented to become entrepreneurs whose products are tested in the market. Success depends in this system on matching consumer or industrial needs to desirable products at a management level of both price and cost of production. The laws of supply and demand have the effect of pushing prices up when supply is limited, and driving them down when supply is unlimited. To remain competitive, a capitalist producer must realize lower costs for producing than his competitors in order to be able to offer the market a desirable product at an acceptable price. Above all, in the concept of ôlaissez-faire,ö Smith advocated free markets and little government regulation of economic activity (From, p. 715).

Smith realized that this system would, in effect, have the impact of pushing wages down as part of the process of controlling production costs. However, increases in the demand for products of all types also works to spur an increase in the number of jobs available to workers. Specialization and division of labor, and increased reliance on technology (in SmithÆs day, industrial machinery) to do the work of human laborers at reduced cost and in shorter order are among the ôdarker sideö of capitalistic society that Smith identified. However, Smith saw t...

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Chapter Questions. (1969, December 31). In LotsofEssays.com. Retrieved 11:35, March 28, 2024, from https://www.lotsofessays.com/viewpaper/1710280.html