As the feudal system in Europe began crumbling with the dawn of the Industrial Revolution a void was created in the European social and economic structure, Scottish philosopher Adam Smith took it upon himself to fill this void and in 1776 published The Wealth of Nations; just as Newtons Principia Mathematica laid the foundation for modern physics so to did Adams work lay the foundation for modern economics. For the next 70 years Adams doctrine went unchallenged until Karl Marx presented his rebuttal in the Communist Manifesto.
Capitalism as envisioned by Smith called for complete private control of the economy, and a small government that practiced a hands off policy. Such a system, Smith believed, would allow for the greatest amount of wealth, and as a byproduct would benefit the majority of the citizens. Capitalism quickly became the economic standard in the British Empire and post-revolutionary France and America, as well as in Germany and the Scandinavian countries as they industrialized. This switch in economic philosophy would result in an unprecedented shift in western society from chiefly agrarian to mostly urban, from feudal lords to corporate tycoons, and from frugality to consumerism. Under capitalism people for the first time in history could, on a large-scale, improve their economic and societal status through hard work and perseverance. Under this system someone like Andrew Carnegie the son of a weaver could through intelligence and determination found a corporate empire. Capitalism was and is by no means perfect, as is evident by the vast separation of wealth it creates, in America today for example according to the University of California at Santa Cruz, the top twenty percent of Americans control 85 percent of the countrys wealth. This obvious economic inequality is the greatest shortcoming of capitalism, and the primary reason for the creation of communism.
Under communism the government controls every aspect of the economy and society....
Please join StudyMode to read the full document