Writing Assignment 1
In this paper, I will contrast three different views of free markets from Karl Marx, Adam Smith and Keynes. Adam Smith believes that the ideas of free market will work positively in the economic society. “Adam Smith is usually thought to argue that the result of everyone pursuing their own interests will be the maximization of the interests of society” (Bishop 1996). He has the idea of everyone is striving to accomplish the wealthiest by focusing on their own personal gain. However, one cannot run a business by their own, it will need other people to buy or consume the products. In short, the system of division of labor and free market could satisfy the public interest. Adam Smith is well known with his metaphor of invisible hand which has included his perspectives of free market. He clarified his perspectives and told any businessmen to focus on the most minimal cost. The buyer decision will be the force that drive the price in the market. Customers would show their carelessness and interest to the items that available in the market. The producers will be encouraged to invest more products in the market based on the consumer demand. This phenomenon will raise the general economic in the society when producers bring more requested products while customers get their favorable items. Based on Adam Smith, he believed that the free market system is a great system which producers are compelled to react as requested by the needs of consumers. He explained that free market is a system which the price is directed based on the demand and supply of the products.
On the other hand, Keynes reprimanded the free market system proposed by Adam Smith. He brought up a few contestations to critic system. Keynes believed that this system is unsuitable, and he wanted to change it with his though of new economic policies. He mentioned about the failure of free market during the 1920s and 1930s which causes the economic crisis. He specified this system as slightest compelling and opined that every one of the crises can be dispensed with just through the astute right thoughts of illuminated governments. Keynes proposed that the cautious overseeing of the assets by government could dispose of all the economic issues. Keynes believed that the accessible assets of the country adequate to explain all the destitution and need issues of the public.
Next, Karl Marx also criticized the free market system proposed by Adam Smith. He believed that uneven method of free market circulation would cause the uneven dispersion of wage and common conflicts. Singular possession would produce amassing of riches in few hands and would restrict the assets for the society. The sole proprietorship would snatch the most extreme conceivable benefit and no one else would be profited out of it. Private possession and free market system would lead the average workers just to destitution and wretchedness. He added free market system would only bring profit for the private ownership, but not for society as Adam Smith proposed.
Bishop, J. (1995). Adam Smith’s Invisible Hand Argument. Journal of Business Ethics, 14(3), 165-180. Retrieved from http://www.jstor.org/stable/25072635 (Accessed: 30 September 2018).