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Shvoong Home>Social Sciences>Economics>Adam Smith and Karl Marx Summary

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Adam Smith and Karl Marx

Book Summary by: AcaDemon    


This paper explains that Adam Smith thought that the separation of ownership and control raised serious questions about the
management of joint-stock companies and led him to analyze the agency problem. The author points out that Adam Smith and Karl Marx agree that an advantage of the joint-stock company is that it allows entrepreneurs to put together large sums of money and capital; furthermore, Marx concludes that the joint-stock form leads to a "tremendous expansion in the scale of production and enterprises, which would be impossible for individual capitals." The paper states that Karl Marx would have called Adam Smith's hunters simple commodity producers with each hunting with his own relatively simple weapon in a forest, which is open to all, and satisfying his needs by exchanging his excess catch against the products of other hunters.
Published: November 12, 2006
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