C) Socialist Economy
... communists can sum up their theory in the pithy phrase:
the abolition of private property.
Karl Marx, Manifesto of the Communist Party, 1848.
Karl Marx wrote about Communism 75 years after Adam Smith put forward his theories. He had observed capitalist industries in Europe and had concluded that they promoted a great deal of inequality. It was the person who owned the pin factory (to take Adam Smith's example) who gained from the increase of efficiency, not the people who actually made the pins, and Marx felt that this was no better than the unfair feudal system of landlords and serfs that capitalism was supposed to have replaced. Marx believed that if all property were owned in common, and each member of society had an equal share, that it would prevent the division of society into two classes: those who produce and those who gain from the sale of those products.
Because he knew that the rich would be unwilling to give up their privileges and their power, Marx theorized that a transition from a capitalist economy to a communist economy where there would be no private ownership might necessitate a violent revolution. His idea was that if the workers (the proletariat) organized they would be able to overthrow those in power and then they could set up a provisional government that would facilitate a gradual move to communism.
Both Adam Smith and Karl Marx believed that the purpose of the economy is to provide for the material needs of society and they both assumed that for the most part humans acted in their own self interest. Adam Smith's system protected an individual's freedom, and said that the common good could be attained by all individuals seeking their personal interest. Karl Marx's system provided for equality among individuals and relied on a strong central government to provide for the common good, at least during the transition to the ideal communist society.
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What was Marx reacting to when he was creating his idea for the communist society?
List the main characteristics of a socialist economy.
What do you think might be sacrificed in the economy of Marx in order to achieve more equality?
Do you think it is possible to create a more equal society where individuals still have a great deal of freedom and self-determination?