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Adam Smith and Karl Marx: On Sweatshops

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Rupini Rajagopalan

on 7 January 2013

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Transcript of Adam Smith and Karl Marx: On Sweatshops

Presented to you today by:
Lori Davis @ Adam Smith
Franziska Geier @ Karl Marx
Rupini Rajagopalan @ Moderator The precise meaning of the term ‘sweatshop’ will vary depending on context.
The U.S. General Accounting Office defines a sweatshop as “an employer that violates more than one federal or state law governing minimum wage and overtime, child labor, industrial homework, occupational safety and health, workers compensation, or industry regulation.”
In the popular mind, a sweatshop is identified with hard work. And, in fact, garment manufacturing’s reliance on human labor helps explain why apparel factories are so often sweatshops. What is your general opinion about sweatshops? ‘If Adam Smith and Karl Marx were alive today, the former would approve of “sweatshop” labour, while the latter would condemn it.’ Is this statement a fair representation of the ideas of these two authors? Adam Smith (1723-1790) was a Scottish philosopher and economist who is best known as the author of An Inquiry into the Nature and Causes of the Wealth Of Nations (1776), one of the most influential books ever written.

It was not The Wealth Of Nations which first made Smith’s reputation, but a book on ethics, The Theory Of Moral Sentiments.

Once again, Smith looks to social psychology to discover the foundation of human morality. Human beings have a natural ‘sympathy’ for others. That enables them to understand how to moderate their behaviour and preserve harmony. And this is the basis of our moral ideas and moral actions Karl Heinrich Marx (5 May 1818 – 14 March 1883) was a German philosopher, economist, sociologist, historian, journalist, and revolutionary socialist:
His ideas played a significant role in the establishment of the social sciences and the development of the socialist movement.
He is also considered one of the greatest economists in history.
He published numerous books during his lifetime, the most notable being The Communist Manifesto (1848) and Capital (1867–1894). He often worked closely with his friend and fellow revolutionary socialist, Friedrich Engels. Sweatshops-Definition Adam Smith Karl Marx Adam Smith's view:
Sweatshop workers today endure conditions much like those that Smith found abhorrent during the 18th century industrialization Represent typical working conditions in a capitalist system and workers are exploited by capitalists by taking away the worker-produced surplus-value Karl Marx's View: Adam Smith: Division of Labor – The PROCESS of Manufacturing: Basis of Sweatshops

1) Increases productivity which results in more capital for the owners
2) Thus, increasing the labor force in the market "It is the great multiplication of the productions of all the different arts, in consequence of the division of labour, which occasions, in a well-governed society, that universal opulence which extends itself to the lowest ranks of the people." The Wealth Of Nations, Book I, Chapter I, p. 22, para. 10 Specialization and division of labour makes work blunt and alienates the worker from his human being and the product Karl Marx's View: "With this division of labour on the one hand and the accumulation of capital on the other, the worker becomes […] thus depressed spiritually and physically to the condition of a machine and from being a man …" (Economic and Philosophical Manuscripts, 1844, First Manuscript)

"… life-long repition of one and the same trivial operation has reduced [the worker] to the mere fragment of a man" (Capital, [Chicago, 1906], I, 534) How can you promote the idea that employed labors have low wages and in some instances no rights? FREE MARKET FREE MARKET FREE MARKET!! Adam Smith's view: No Restrictions The benefits of freedom…

[Without trade restrictions] the obvious and simple system of natural liberty establishes itself of its own accord. Every man...is left perfectly free to pursue his own interest in his own way.... The sovereign is completely discharged from a duty [for which] no human wisdom or knowledge could ever be sufficient; the duty of superintending the industry of private people, and of directing it towards the employments most suitable to the interest of the society.
The Wealth Of Nations, Book IV, Chapter IX, p. 687, para. 51. What about the distribution of wealth? What improves the circumstances of the greater part can never be regarded as an inconveniency to the whole. No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable.

The Wealth Of Nations, Book I Chapter VIII, p.96, para. 36 Factory owners/Capitalist own the means of production and they have the power to exploit the workers

Through the medium of money capitalists have the possibility to accumulate endless wealth

Workers have nothing to sell but their labour – time, which they sell. Capitalists compensate workers hardly with enough money to make a living (factory workers take other additional jobs) Karl Marx's View: Do sweatshops exist in your perfect economy? • No fixed occupation, but diverse activities
• Commodity-trade instead of financial exchange
• State decreases heavily, nearly till non-existence Karl Marx's view: "In communist society, where nobody has one exclusive sphere of activity but each can become accomplished in any branch he wishes, society regulates the general production and thus makes it possible for me to do one thing today and another tomorrow, to hunt in the morning, fish in the afternoon, rear cattle in the evening, criticise after dinner, just as I have a mind, without ever becoming hunter, fisherman, herdsman or critic." (The German Ideology, 1845) Same Views on Degradation to Labor

‘The man whose whole life is spent performing a few simple operations, of which the effects are perhaps always the same, or very nearly the same,…generally becomes as stupid and ignorant as it is possible for a human creature to become. The torpor of his mind renders him not only incapable of relishing or bearing part in any rational conversation, but of conceiving any generous, noble, or tender sentiment, and consequently of forming any just judgement concerning many even of the ordinary duties of private life.’

The Wealth of Nations Book V Chapter 1 Verse 178. Smith thought that slavery was not economically viable:

From the experience of all ages and nations, I believe, that the work done by free men comes cheaper in the end than the work performed by slaves. Whatever work he does, beyond what is sufficient to purchase his own maintenance, can be squeezed out of him by violence only, and not by any interest of his own. (36)
The Wealth of Nations, Book 1 Chapter 8 para 40. Thank You "From each according to his ability, to each according to his needs."

Critique of the Gotha Program, Karl Marx in 1875 What do you think about division of labour? Karl Marx's view:

Wages are just high enough to ensure reproduction! No to Mundane Jobs! Conclusion Adam Smith does not favor the implementation whereas Karl Marx would condemn the concept of Sweatshops!! Smith (1976) in the Wealth of Nations, saw the choice about paying each worker a "living wage" was clear, economic and moral. A man must always live by his work, and his wages must at least be sufficient to maintain him. They must even upon most occasions be somewhat more; otherwise it would be impossible for him to bring up a family, and the race of such workmen could not last beyond the first generation (Smith, 1776, CHAPTER VIII Of the Wages of Labor). Adam Smith, among others, contended that interests of self-centered interests of merchants and manufacturers ran counter to the general welfare of society. Smith advocated local accountability, moral reasoning, and a limit to bigness of business. Smith did favor the landowners over the merchants and manufacturers.

The proprietor of land is necessarily a citizen of the particular country in which his estate lies. The proprietor of stock is properly a citizen of the world, and is not necessarily attached to any particular country (WN, 2: 848).
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