TS ISSUE #01 – Can Capitalism Lead to Human Happiness?

1. What is the rationale of capitalism according to Adam Smith? It is portrayed as an unintended coordination of self-interested actions into the production of greatest welfare of the whole.

2. What happens if we leave self-interested people to seek their own advantage? Adam Smith argues the result, unintended by any one of them, will be the greater advantage of all. No government interference is necessary to protect the general welfare.

3. Does Karl Marx agree? No, leave people to their own self-interested devices, and those who by luck and inheritance own the means of production will rapidly reduce everyone else to virtual poverty. The few will be fabulously happy, but all others will live in misery.

4. Why will this happen? What will take place if this unintended coordination of self-interested actions takes place, are those who by luck and inheritance own the means of production will rapidly reduce everyone else to virtual slavery. The few may be fabulously happy, but all others will live in misery.

5. Adam Smith and Karl Marx are products of their age. What were world economic/ social conditions like when they were expressing their philosophies?

a. 18th Century (Smith) was the rise of Mercantilism, and most of the economy was agriculture. Peasants, growth of colonies, great rivalry.

b. 19th Century (Marx) saw a rapidly expansion of manufacturing. Workers in factories, rise of nation states and empires.

6. How is wealth distributed under capitalism and under communism?

a. Adam Smith has no way of ensuring justice in wealth distribution; his theory concentrates on the formation of capital or wealth.

b. Karl Marx focuses not on the making of wealth, but instead asks how wealth is distributed; who get it and gets to enjoy it, when the capitalist process has generated it.

7. Should we be “our brother’s keepers”? Should we share wealth with the workers who produce it? Will capitalists lose their motivation? What would Smith and Marx say?

8. What is the “division of labor” and how does it impact the quantity of work? How did Henry Ford apply this practice? Breaking down jobs into their smallest components with the assembly line.

9. How does the “division of labor” increase productivity?

a. Increases dexterity in every particular workman.

b. Saving of the time that is commonly lost in passing from one species of work to another.

c. The invention of a great number of machines which facilitate and abridge labor and enable one man to do the work of many.

10. How does exchange help everyone involved in a transaction? “Give me that which I want, and you shall have this which you want.”

11. What is Smith’s argument for free trade? “Whether the advantages which one country has over another be natural or acquired, is in this respect of no consequence. As long as one country has those advantages and other wants them, it will always be more advantageous for the latter rather to buy of the former than to make.”

12. What does Smith think of protectionism? “To give the monopoly of the home market to the produce of domestic industry, in any particular art or manufacture, is in some measure to direct private people in what manner they ought employ their capitals, and must, in almost all cases, be either a useless or hurtful regulation.”

13. Smith believed that “if a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them.” What do you think Adam Smith would say about international trade today with all of its outsourcing? Opinions will vary.

14. What is the source of modern bourgeois society according to Marx? From the serfs of the middle ages sprang the chartered burghers of the earliest towns. The bourgeois sprouted from the ruins of feudal society, and still has class antagonisms.

15. Who is the Proletariat, and how do they relate to the bourgeois? They are the workers, and they struggle in a class war with the bourgeois.

16. According to Marx, the bourgeoisie has turned every occupation into paid wage laborers. Are we not all “paid wage-laborers?” Answers will vary.

17. What is the result of a constantly expanding global market? It chases the bourgeoisie over the whole surface of the globe, creating connections everywhere.

18. What happens to the modern laborer according to Marx? “Instead of rising with the progress of industry, they sink deeper below the conditions of existence of his own class.”

19. Why did the modern working class in the West not overthrow the bourgeois? Why did revolutions occur in Russia and China? Opinions will vary, but requires an understanding of political and social history.

20. What would be the conflicting opinions of Smith and Marx regarding corporate welfare-grants, price supports and protective tariffs? Opinions will vary.

21. What safety nets are needed in our society? Health care? Education? Healthful environment? Affordable housing? Opinions will vary.

22. How important is the government in regulations covering the safety of workers, the environment, and benefits to all employees? Opinions will vary.

23. Will people work hard in an economic system other than capitalism? Capitalism has incentives, but what about other systems? Opinions will vary.

24. What economic system capitalism, socialism, or communism, can bring the greatest happiness to the most people? Individual opinions.

25. Is it the responsibility of the business community or the individual businessperson to undertake the repair of social institutions? If neither, is it up to the government to do so? Opinions will vary.

26. Do you think the ideas and the reality of capitalism and socialism in the 20th Century are very different from what Smith and Marx expected. Why or why not? Individual opinions.

27. Do we see the visible hands of the CEOs and the Wall Street Analysts in the redistributive activities of today’s economy?

28. What will the economic system be like in the 21st Century in regards to:

a. How will jobs be created?

b. Individuals right to a job.

c. Health care.

d. Pensions.

e. Safety nets for people who can’t function in society

29. Are we “our brother’s keepers?” What would Marx and Smith say?