Economic Systems Primary Sources

Download 33.89 Kb.
Size33.89 Kb.

Economic Systems Primary Sources

OVERVIEW: Every society must address the basic economic question of how to manage the problem of scarcity, which is how to produce and distribute limited resources, who should own the means of production, and how should these resources be allocated?

Part I: Capitalism Excerpt from: An Inquiry into the Nature and Causes of the Wealth of Nations (1776) By Adam Smith

There are three orders in society - those who live by rent, by labour and by profits. Employers constitute the third order. . . The proposal of any new law by or regulation which comes from this order ought always to be listened to with the greatest precaution and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous but with the most suspicious attention. It comes from an order of men whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even oppress the public. . .

Masters are always and everywhere in a sort of tacit* but constant and uniform combination not to raise the wages of workers. . . . Masters. . .sometimes enter into particular combinations to sink the level of wages. . . These are always conducted with the utmost silence and secrecy. . .

Wherever there is great property there is great inequality. Civil government, so far as it is instituted for the security of property, is in reality, instituted for the defence of the rich against the poor, or of those who have some property against those who have none at all. . .

Perfect liberty can never happen if government heeds or is entrusted to the mean rapacity**, the monopolizing spirit of merchants and manufacturers who neither are, nor ought to be the rulers of mankind.

* unspoken, inferred, implied **greed

Part II: Socialism Excerpt from: A New View of Society Or Essays on The Principle of the Formation of the Human Character and the Application of the Principle to Practice (Essay Four) By Robert Owen 1816

The end of government is to make the governed and the governors happy. That government, then, is the best, which in practice produces the greatest happiness to the greatest number; including those who govern, and those who obey.

In a former Essay we said, and it admits of practical demonstration, that by adopting the proper means, man may by degrees be trained to live in any part of the world without poverty, without crime, and without punishment; for all these are the effects of error in the various systems of training and governing error proceeding from very gross ignorance of human nature.

It is of primary importance to make this ignorance manifest, and to show what are the means which are endowed with that transcendent efficacy.

We have also said that man may be trained to acquire any sentiments and habits, or any character; and no one now, possessing pretensions to the knowledge of human nature, will deny that the government of any independent community may form the individuals of that community into the best, or into the worst characters.

If there be one duty therefore more imperative than another, on the government of every country, it is, that it should adopt, without delay, the proper means to form those sentiments and habits in the people, which shall give the most permanent and substantial advantages to the individuals and to the community.

Survey the acquirements of the earliest ages; trace the progress of those acquirements, through all the subsequent periods, to the present hour; and say if there be anything of real value in them, except that which contributes in practice to increase the happiness of the world.

And yet, with all the parade of learning contained in the myriads of volumes which have been written, and which still daily pour from the press, the knowledge of the first step of the progress which leads to human happiness remains yet unknown or disregarded by the mass of mankind.

The important knowledge to which we allude is, 'That the old collectively may train the young collectively, to be ignorant and miserable, or to be intelligent and happy, And, on investigation, this will be found to be one of those simple yet grand laws of the universe, which experience discovers and confirms, and which, as soon as men become familiar with it, will no longer admit of denial or dispute. Fortunate will be that government which shall first acquire this knowledge in theory, and adopt it in practice.

To obtain its introduction into our own country first, a mode of procedure is now submitted to the immediate governing powers of the British Empire; and it is so submitted, with an ardent desire that it may undergo the most full and ample discussion, that if it shall, as on investigation it will, be found to be the only consistent and therefore rational, system of conducting human beings, it may be temperately and progressively introduced, instead of those defective national practices by which the state is now governed

Part III: Communism Karl Marx and Friedrich Engels: The Communist Manifesto (1848)

Although it at first had little or no impact on the widespread and varied revolutionary movements of the mid-19th century Europe, the Communist Manifesto was to become one of the most widely read and discussed documents of the 20th century. Marx sought to differentiate his brand of socialism from others by insisting that it was scientifically based in the objective study of history, which he saw as being a continuous process of change and transformation. Just as feudalism had naturally evolved into mercantilism and then capitalism, so capitalism would inevitably give way to its logical successor, socialism (a term which in Marx's usage includes its most advanced form, communism) as the necessary result of class struggle. Marx's insistence that tough-minded realism should replace the utopian idealism of earlier socialists had profound consequences: it enabled revolutionaries like Lenin to be put it into action, but it also tended to encourage its followers to accept ruthless means to justify what they believed were historically necessary ends. Radical politics were being much more widely discussed than the small number of radicals justified; but Marx uses this fact to his advantage by proclaiming that any ideology so feared must be important and worth explaining clearly. In the notes, "Marx" is used as shorthand for both Marx (the theoretician) and Engels (the more eloquent writer of the two).The Manifesto was originally issued in several languages, including this English version.

A specter is haunting Europe--the specter of communism. All the powers of old Europe have entered into a holy alliance to exorcise this specter: Pope and Czar, Metternich and Guizot, (1) French Radicals and German police spies.

Where is the party in opposition that has not been decried as communistic by its opponents in power? Where the Opposition that has not hurled back the branding reproach of communism, against the more advanced opposition part-ies, as well as against its reactionary adversaries?

Two things result from this fact:

I. Communism is already acknowledged by all European powers to be itself a power.

II. It is high time that Communists should openly, in the face of the whole world, publish their views, their aims, their tendencies, and meet this nursery tale of the specter of communism with a manifesto of the party itself. (2)

Part I: Bourgeois And Proletarians

The history of all hitherto existing society is the history of class struggles.

Freeman and slave, (3) patrician and plebeian, (4) lord and serf, (5) guildmaster and journeyman, (6) in a word, oppressor and oppressed, stood in constant opposition to one another, carried on an uninterrupted, now hidden, now open fight, a fight that each time ended, either in a revolutionary reconstitution of society at large, or in the common ruin of the contending classes.

…We find almost everywhere a complicated arrangement of society into various orders, a manifold gradation of social rank. In ancient Rome we have patricians, knights, plebeians, slaves; in the Middle Ages, feudal lords, vassals, guild-masters, journeymen, apprentices, serfs; in almost all of these classes, again, subordinate gradations. The modern bourgeois society that has sprouted from the ruins of feudal society, has not done away with class antagonisms. It has but established new classes, new conditions of oppression, new forms of struggle in place of the old ones.

Our epoch, the epoch of the bourgeoisie, (7) …Society as a whole is more and more splitting up into two great hostile camps, into two great classes directly facing each other--bourgeoisie and proletariat. . . . (8)

Modern industry has established the world market, for which the discovery of America paved the way. (9) This market has given an immense development to commerce, to navigation, to communication by land. This development has, in its turn, reacted on the extension of industry; and in proportion as industry, commerce, navigation, railways extended, in the same proportion the bourgeoisie developed, increased its capital…

The bourgeoisie has played a most revolutionary role in history. (12)

The bourgeoisie, wherever it has got the upper hand, has put an end to all feudal, patriarchal, idyllic (peaceful) relations. It has pitilessly torn asunder the motley(varied) feudal ties that bound man to his "natural superiors," and has left no other bond between man and man than naked self-interest, than callous "cash payment." It has drowned the most heavenly ecstasies of religious fervor, of chivalrous enthusiasm, of philistine sentimentalism, in the icy water of egotistical calculation. It has resolved personal worth into exchange value, and in place of the numberless indefeasible chartered freedoms, has set up that single, unconscionable freedom--Free Trade. In one word, for exploitation, veiled by religious and political illusions, it has substituted naked, shameless, direct, brutal exploitation. (13)

Part II: Proletarians and Communists What else does the history of ideas prove, than that intellectual production changes its character in proportion as material production is changed? The ruling ideas of each age have ever (14) been the ideas of its ruling class. (15)

When people speak of ideas that revolutionize society, they do but express the fact that within the old society the elements of a new one have been created, and that the dissolution of the old ideas keeps even pace with the dissolution of the old conditions of existence.

Part IV: Position of the Communists in Relation to the Various Existing Opposition Parties

In short, the Communists everywhere support every revolutionary movement against the existing social and political order of things. (17)

In all these movements they bring to the front, as the leading question in each case, the property question, no matter what its degree of development at the time.

Finally, they labor everywhere for the union and agreement of the democratic parties of all countries.

The Communists disdain to conceal their views and aims. (18) They openly declare that their ends can be attained only by the forcible overthrow of all existing social conditions. Let the ruling classes tremble at a Communist revolution. The proletarians have nothing to lose but their chains. They have a world to win.

Workingmen of all countries, unite! (19) Borrowed from: Modern History Sourcebook

Capitalism Questions:

  1. Highlight 1-2 quotes the represents the major idea of capitalism in the “Wealth of Nations”

  2. According to Smith, who is good and who is bad?

  1. What is the role of competition, according to Smith?

  1. Explain Smith’s concept of the “invisible hand”—what does it represent?

Socialism Questions:

  1. Highlight 1-2 major idea from “A View of Society”

  2. What is the goal of socialism?

  1. According to Owen, what is the government’s role?

  1. Owen believes that issues such as poverty arise from what?

Communism Questions:

  1. Highlight 1-2 of the major ideas from “ The Communist Manifesto”

  2. How does Marx feel about capitalism? Why?

  1. How does Marx define history thus far? What do you think of his idea?

  1. According to Marx, what is the big problem with industrialization?

  1. What does Marx suggest or want?


(1) German and French conservatives.

(2) Marx opposed secret conspiratorial communist organizations because he felt that the only successful revolution would need the support of the overwhelming mass of society; and people could not be expected to support what they did not understand or even know about.
(3) Typical of ancient civilizations like that of the Greeks. (4) Roman social classes. (5) From the European Middle Ages.

(6) Representing the later Middle Ages and Renaissance.

(7) The term originally meant simply the class of people who lived in cities, but here it means those whose income comes from doing business rather than--like the aristocracy--from inherited estates or--like the proletariat--from wages.

(8) The working class, people who make their living by working for others rather than owning or investing in businesses.

(9) Marx's comments on the importance of the world market, developed further in passages here omitted, sounds very modern. He argued that the differences between countries would diminish as they adopted capitalism and increased their international trade, paving the way for a stateless world united in communism.

(10) Marx particularly has in mind the European revolutions of 1789-1848, in which the bourgeoisie, which had long before become the dominant economic force in society, asserted its claims to political power as well.

(11) In this famous comment, the modern democratic states are dismissed as mere tools of the bourgeoisie, since it is the wealthy who run them and set their agendas, despite their claims to popular representation.

(12) Although the following paragraph outlines this role in negative terms, Marx believed that the transformation of the world wrought by capitalism was absolutely necessary to provide the foundations for communism; so the bourgeoisie are revolutionary in fact, though unwittingly so.

(13) Although this is harshly put, Marx believes that the idealism which justified earlier class structures was indeed an illusion, a repressive deception that needed to be destroyed.

(15) One of Marx's most influential concepts. In a capitalist society people think competition natural because capitalism requires competition; but in the Middle Ages submission to one's social "superiors" was seen as equally natural. Communism is not "against human nature" because there is no such thing--only the social values produced by certain kinds of economic organization. Contemporary Marxist analysis attempts to trace society's values back to the economic and political interests of the most powerful people in society.

(17) Marx argues that communist should work with all "progressive" movements in what were later to be called "united fronts."

(18) Note the repeated emphasis on openness. When communists were viewed as conspirators they risked being seen as enemies of the people they were trying to help.

(19) This stirring conclusion is almost always misquoted as "Working men of all countries, unite! You have nothing to lose but your chains!"

Share with your friends:

The database is protected by copyright © 2020
send message

    Main page