Capitalism Can Lead to Human Happiness
According to Adam Smith, a renowned economist and philosopher, capitalism can lead to human happiness. One of Smith’s key arguments supporting this claim is the labor division in a capitalist economy. When tasks are divided among different workers, the prices of goods and services drop dramatically, increasing their availability to lower-income groups. Due to the increased specialization of labor, the living costs for the poor decrease, and their ability to learn a trade and find employment increases.
Furthermore, Smith argues that the labor division is not the result of the will to improve society but of self-interest. Due to self-interest, people buy goods and services they are not specialized in from others rather than perform them themselves. For example, if someone cannot make shoes, it will take more time and money to make them themselves than to buy them from a store. Thus, the need to specialize and cooperate arises from a person’s understanding of their skills and their need to serve their interests.
To summarize, according to Adam Smith, serving one’s own interests unknowingly serves the interests of the greater whole. The open market incentivizes businesses to work for the benefit of people, thereby serving the greater good and increasing society’s wealth. Thus, despite their will or awareness, an entrepreneur’s desire to advance their personal interests benefits society. Through the so-called invisible hand of the market and with minimal government intervention, the profits of the country’s industries flow to the areas where they are used most effectively. They will thus bring more wealth to the nation.
Capitalism Can Not Lead to Human Happiness
According to Karl Marx, however, capitalism cannot lead to human happiness, as it serves only the interests of one class—the bourgeoisie. The division of labor that capitalism entails simplifies work, reducing skill requirements and wages. Marx views this process as a constant downward spiral in the living conditions of the majority of the population (the proletariat) and an increase in the wealth of the minority (the bourgeoisie).
Moreover, this division leads to workforce alienation, as workers may be assigned low-skilled jobs that offer no sense of accomplishment. In the medieval ages, a single artisan could create a product, be proud of the result, and be satisfied with the payment he received. The proletarian, however, can make only a small contribution to the final product and may feel alienated from his labor.
For example, a shoemaker makes boots all by himself, from the soles to the shoelaces. He starts, maintains, and finishes the work process, feels in control of it and satisfied with it, even if he makes a pair of boots per month. A worker in a shoe factory, however, only attaches soles to the boots and does that hundreds, even thousands of times per day. His work feels dull and mechanical, and his job doesn’t make him proud.
To summarize, Marx argues that capitalism, by its nature, cannot lead to happiness for several reasons. These reasons include economic divisions between societal classes, the alienation of the workforce, and the ever-decreasing living conditions of workers. Instead, he calls for the creation of an international union of the proletariat to combat the bourgeoisie’s exploitation.