A Means to an End

Written by Erika Morris on January 27th, 2009

In comparing Marx and Smith, at first glance, they both seem to profess similar ideas, especially when dealing with the idea of labor. But, one must remember that although they both entertain the same ideas about labor, that these theories are a somewhat similar means to a very different ends.

One thing that this “labor theory of value” doesn’t directly address (although Smith does address this a bit later on) is the impact that “price” has on a commodity. Although they agree that the “value” of a commodity may not change, the price can still be volatile. In today’s world, the price of a good is what drives the market, not the “value” per se. For example, even if diamonds took a large amount of labor to retrieve, cut, etc., if the masses disliked diamonds as a commodity and preferred another gem, the price of diamonds would be less than the nominal value.

Next, one must incorporate the idea of supply and demand. Coming up is the vital difference between Marx and Smith. Both theories support the creation of a specialized work force, but Smith advocates progress, while Marx does not necessarily. Smith, by instilling competition, an important part of capitalism, fosters ingenuity, technological innovation, and risk. Using these tools, a competitive market drives down the value and price of a commodity: this end is mutually beneficial to producers and consumers alike. Marx on the other hand, by creating equal opportunities and equal results for all, does not foster ingenuity: this end can create stagnant values and prices for commodities.

Although it is debated which of these are more beneficial to society, we can see in our present day how capitalism has fared us. There may be a time when Marxism has the opportunity to flourish and we can all draw our conclusions then.

-Erika Morris

 

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