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Adam Smith vs Karl Marx living in the typical capitalist community in the United States it is much easier to relate to the thoughts of Adam Smith This is not to say that I do not agree with some of the precepts of pure Communism but like the old adage says Communism looks good on the outside Adam Smith states his opinion on the mercantile system and its faults while he dissected clarified and revolutionized the mercantilist economy and advocated the classical economy Smith disagreed with the regulation of economic activity by the State in the interests of the merchant classes He proposed a free competitive market which through an invisible hand would do a better job in guiding the economy than the mercantilists He emphasized the invisible hand Every individualgenerally indeed neither intends to promote the public interest nor knows how much he is promoting it By preferring the support of domestic to that of foreign industry he intends only his own security and by directing that industry in such a manner as its produce may be of the greatest value he intends only his own gain and he is in this as in many other cases led by an invisible hand to promote an end which was no part of his intention Nor is it always the worse for the society that it was no part of it The system in which the invisible hand is most often assumed to work is the free market Adam Smith assumed that consumers choose for the lowest price and that entrepreneurs choose for the highest rate of profit He asserted that by thus making their excess or insufficient demand known through market prices consumers directed entrepreneurs investment money to the most profitable industry Remember that this is the industry producing the goods most highly valued by consumers so in general economic well-being is increased One extremely positive aspect of a market-based economy is that it forces
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