What were the goals of laissezfaire and marxism?

Question

compare and contrast...???

Answer 1

laissez-faire

[Fr.,=leave alone], in economics and politics, doctrine that an economic system functions best when there is no interference by government. It is based on the belief that the natural economic order tends, when undisturbed by artificial stimulus or regulation, to secure the maximum well-being for the individual and therefore for the community as a whole.

Formulations of the Doctrine

Historically, laissez-faire was a reaction against mercantilism, a system of commercial controls in which industry and trade, especially foreign trade, were merely seen as means of strengthening the state. Navigation laws, trade monopolies, taxes, and paternalistic regulations of all kinds bore heavily upon the rising class of merchants in the period of European colonial expansion. It was on behalf of this class that the French physiocrats, pioneer economists in the 18th cent., first formulated the principles of laissez-faire. With the physiocrats, state noninterference became a cardinal teaching; they especially opposed the taxation of commercial pursuits.

Opposition to mercantilism and state paternalism also motivated Adam Smith, father of classical economics, whose name more than any other is connected with British laissez-faire doctrines. Smith believed that individual welfare rather than national power was the correct goal; he thus advocated that trade should be free of government restrictions. When individuals were free to pursue self-interest, the “invisible hand” of rivalry or competition would become more effective than the state as a regulator of economic life. Smith did not believe in laissez-faire in an absolute sense; he found a place for government activity in public works, such as the building of canals and docks to facilitate trade, and in the regulation of foreign commerce to protect certain home industries.

In the hands of Jeremy Bentham the doctrine of laissez-faire became a philosophy of individualism and of utilitarian ethics, and John Stuart Mill brought it to what was probably its highest point. The strong individualism of the theory naturally appealed to the factory owners and merchants of the Industrial Revolution, whose attempts to transform society along capitalistic lines were often hampered by old laws and the opposition of landed interests.

The so-called Manchester school of economics, especially Richard Cobden and John Bright, popularized the doctrines of free trade and laissez-faire, which, after initially being considered radical doctrines, were becoming the accepted theory of classical economics. Cobden and Bright, both successful businessmen, brought laissez-faire into the arena of politics: they secured the repeal of the corn laws—mercantilist import duties that raised the price of food needed by the industrial workers—and they opposed even the minimal provisions of the factory acts that Parliament had passed in order to regulate such abuses as long hours and woman and child labor. Laissez-faire principles were nowhere embodied fully in legislation. Governments, at the very least, continued to levy tariffs as a means of protecting domestic manufacturers.

Modifications

As the system of capitalist enterprise evolved in the 19th cent., more and more businesses found it in their interest to combine with their competitors in huge trusts or cartels in order to control prices and production. Competition, which had been expected to regulate the market, seemed instead to be encouraging monopoly. The principle of state noninterference was discarded; indeed, during the 20th cent. the state was often called upon to restore and preserve freedom of competition where it appeared to be in danger of disappearing. Agreements in restraint of trade and practices of “unfair” competition were outlawed. Thus the practice of laissez-faire was modified. The theory, however, was not abandoned; it became a tenet of the opponents of socialism. It was credited with lowering consumer prices by eliminating the high costs of competition. In that way, the emphasis in laissez-faire theory was shifted from competition to the importance of profit as an incentive to production and of individual initiative as necessary to economic progress.

Marxism,

economic and political philosophy named for Karl Marx. It is also known as scientific (as opposed to utopian) socialism. Marxism has had a profound impact on contemporary culture; modern communism is based on it, and most modern socialist theories derive from it (see socialism). It has also had tremendous effect on academia, influencing disciplines from economics to philosophy and literary history.

Although no one treatise by Marx and his coworker Friedrich Engels covers all aspects of Marxism, the Communist Manifesto suggests many of its premises, and the monumental Das Kapital develops many of them most rigorously. Many elements of the Marxist system were drawn from earlier economic and historical thought, notably that of Georg Wilhelm Friedrich Hegel, the comte de Saint-Simon, J. C. L. de Sismondi, David Ricardo, Charles Fourier, and Louis Blanc; but Marxist analysis as fully developed by Marx and Engels was unquestionably original.

Dialectical Materialism

The Marxist philosophical method is dialectical materialism, a reversal of the dialectical idealism of Hegel. Dialectical materialism presumes the primacy of economic determinants in history. Through dialectical materialism was developed the fundamental Marxist premise that the history of society is the inexorable “history of class struggle.” According to this premise, a specific class could rule only so long as it best represented the economically productive forces of society; when it became outmoded it would be destroyed and replaced. From this continuing dynamic process a classless society would eventually emerge. In modern capitalist society, the bourgeois (capitalist) class had destroyed and replaced the unproductive feudal nobility and had performed the economically creative task of establishing the new industrial order. The stage was thus set for the final struggle between the bourgeoisie, which had completed its historic role, and the proletariat, composed of the industrial workers, or makers of goods, which had become the true productive class.

Economic and Political Theories

Supporting Marxism's historical premises are its economic theories. Of central importance are the labor theory of value and the idea of surplus value. Marxism supposes that the value of a commodity is determined by the amount of labor required for its manufacture. The value of the commodities purchasable by the worker's wages is less than the value of the commodities he produces; the difference, called surplus value, represents the profit of the capitalist. Thus the bourgeois class has flourished through exploitation of the proletariat.

The capitalist system and the bourgeoisie were seen as riven with weaknesses and contradictions, which would become increasingly severe as industrialization progressed and would manifest themselves in increasingly severe economic crises. According to the Communist Manifesto, it would be in a highly industrialized nation, where the crises of capitalism and the consciousness of the workers were far advanced, that the proletarian overthrow of bourgeois society would first succeed. Although this process was inevitable, Marxists were to speed it by bringing about the international union of workers, by supporting (for expediency) whatever political party favored “the momentary interests of the working class,” and by helping to prepare workers for their revolutionary role.

The proletariat, after becoming the ruling class, was “to centralize all instruments of production in the hands of the state” and to increase productive forces at a rapid rate. Once the bourgeoisie had been defeated, there would be no more class divisions, since the means of production would not be owned by any group. The coercive state, formerly a weapon of class oppression, would be replaced by a rational structure of economic and social cooperation and integration. Such bourgeois institutions as the family and religion, which had served to perpetuate bourgeois dominance, would vanish, and each individual would find true fulfillment. Thus social and economic utopia would be achieved, although its exact form could not be predicted.