Three English Discussion response

Overview of Economic Theories Four Economists and Their Theories There are four major economists who’s influence is still felt in modern economics: Adam Smith, Karl Marx, John Maynard Keynes (pronounced canes), and Milton Friedman (the father of the Chicago School ofEconomics). Each was a highly original thinker who developed economic theories that were put intopractice and affected the world's economies for generations. In addition, one of the major differencesbetween the two predominant political parties is modern US politics revolves around a fundamentaldisagreement about how the economy should function and what, if any, the role of government should bein curbing or correcting the market. Adam Smith and The Invisible Hand of Capitalism Adam Smith, a Scot and a philosopher who lived from 1723 to 1790, is considered the founder of moderneconomics. In Smith's time, philosophy was an all-encompassing study of human society in addition to aninquiry into the nature and meaning of existence. Deep examination of the world of business affairs ledSmith to the conclusion that collectively the individuals in society, each acting in his or her own self-interest, manage to produce and purchase the goods and services that they as a society require. Hecalled the mechanism by which this self-regulation occurs “the invisible hand,” in his groundbreaking book, The Wealth of Nations, published in 1776, the year of America's Declaration of Independence. While Smith couldn't prove the existence of this “hand” (it was, after all, invisible) he presented many instances of its working in society. Essentially, the butcher, the baker, and the candlestick makerindividually go about their business. Each produces the amount of meat, bread, and candlesticks hejudges to be correct. Each buys the amount of meat, bread, and candlesticks that his household needs.And all of this happens without their consulting one another or without all the king's men telling them howmuch to produce. In other words, it's the free market economy in action. In making this discovery, Smith founded what is known as classical economics. The key doctrine ofclassical economics is that a laissez-faire (“hands-off”) attitude by government toward the marketplace will allow the “invisible hand” to guide everyone in their economic endeavors, create the greatest good for the greatest number of people, and generate economic growth. Smith also delved into the dynamics ofthe labor market, wealth accumulation, and productivity growth. His work gave generations of economistsplenty to think about and expand upon.

Karl Marx: It's Exploitation! Karl Marx, a German economist and political scientist who lived from 1818 to 1883, looked at capitalismfrom a more pessimistic and revolutionary viewpoint. Where Adam Smith saw harmony and growth, Marxsaw instability, struggle, and decline. Marx believed that once the capitalist (the guy with the money andthe organizational skills to build a factory) has set up the means of production, all value is created by thelabor involved in producing whatever is being produced. In Marx's view, presented in his 1867 tome DasKapital (Capital), a capitalist's profits come from exploiting labor—that is, from underpaying workers forthe value that they are actually creating. For this reason, Marx couldn't abide the notion of a profit-oriented organization. This situation of management exploiting labor underlies the class struggle that Marx saw at the heart ofcapitalism, and he predicted that that struggle would ultimately destroy capitalism. To Marx, class struggleis not only inherent in the system—because of the tension between capitalists and workers—but alsointensifies over time. The struggle intensifies as businesses eventually become larger and larger, due tothe inherent efficiency of large outfits and their ability to withstand the cyclical crises that plague thesystem. Ultimately, in Marx's view, society moves to a two-class system of a few wealthy capitalists and amass of underpaid, underprivileged workers. Marx predicted the fall of capitalism and movement of society toward communism, in which “the people” (that is, the workers) own the means of production and thus have no need to exploit labor for profit.

In it, I argue that "one of the major differences between the two predominant political parties is modern US politics revolves around a fundamental disagreement about how the economy should function and what, if any, the role of government should be in curbing or correcting the market."