Smith, Malthus, Marx

Smith, Malthus, and Marx.

While these three individuals come to some very different conclusions, it is worth noticing the similarities in their arguments. The common thread that can fray shows us how close these arguments really are and perhaps why debate around them becomes so heated.

The first chapter of your reading on Smith concerns the division of labor and the “opulence” that results from the division of labor. The second chapter concerns the principle behind the division of labor. The third on the relationship between the division of labor and size of the market. Chapter IV is about money which sets the stage for Chapter 5 where Smith argues that real value resides in labor.

Malthus agrees with the notion that value resides in labor, but vehemently disagrees with Smith on the notion that the division of labor makes everyone better off. In fact, Malthus does not believe it ever could make everyone better off. Remember Smith argues in Chapter 1 section 4 that agriculture does not benefit as much from the division of labor as manufacturing. Malthus completes the argument. If manufacturing is more productive it will initially provide returns that support an ever increasing population. It will do, and must do, this more quickly than agriculture can keep up. That is, manufacturing will continue to give more workers the opportunity to procreate. Given their natural desire to procreate, or perform actions that result in procreation, the number of workers will eventually outstrip the ability of agriculture to feed them. When this happens either famine, disease, or both will wipe out a number of workers. This kills so many that the surviving workers are now easily supported by existing agriculture leading to the exact same cycle again.

Malthus agrees with Smith on the productivity of land, the short term results of the division of labor, and the ultimate value of any commodity.

Marx, likewise, utilizes Smith’s labor theory of value. The first page of our reading on the manifesto exactly acknowledges Smith’s point about the division of labor and markets. In these opening pages Marx is arguing that because of the explosive growth in markets, especially with the discovery of America, there was a corresponding explosion in the division of labor. Unlike Smith who see this as a good thing, though, Marx sees it as perhaps better than feudalism, but worse than what the proletariat deserve.

BK