Abstract:
Smithian Economics is associated with Capitalism. It’s focused on coordination of global economics; as anti-competitive behaviors between nation states is the issue that Smith seemed to see as a most concerning one. This inference is astute considering that this anti-competition probably births the maximization policies that have produced many extremely destructive outcomes.
Marxian Economics is associated with Socialism. It focuses on more egalitarian distribution of wealth. This is also an astute inference; as aggregation of wealth has been one of the most destructive influences on economies since the dawn of civilization.
It’s clear that neither Smithian nor Marxian economic principles are generally focused in an economic sense. Both are rooted in finance and politics rather than systems economy. Neither address environmental influence; and for that reason, both are only likely to play a small role in economic modeling in the future.
Capitalism:
Capitalisms’ focus on global economics has been very useful; but it’s far from enough to result in economy. This is because it is truncated in it’s focus. This is probably the reason that it has failed to produce the outcomes that Smith desired. The notion of “free will” distracts from the influence of consequence; and was the reigning assessment of human behavior in Smiths’ time. This prevented him from understanding why his assessments wouldn’t have been seriously considered by the influential economic entities that succeeded him. The anti-competitive behaviors that he criticized thus persisted. Smith himself however, observed through history and understood that consequences would arise from the anti-competitive behaviors; but yet failed to effectively convey his message.
Though the standard of living has vastly improved under capitalistic models, it’s not to say that Capitalism is responsible for it. This is an observation that has occurred in every economic system that has ever existed. The rate at which the standard of living has improved is more likely associated with the rate of technological advancement; as the two have been closely correlated throughout history.
Socialism:
It began with criticisms of Smithian Economics by Carl Marx. It’s held it’s focus on Egalitarianism to this day however. The arguments made are centered around equality of distribution of wealth. For instance, though the workers (laborers) are part of the means of production and are significantly responsible for the production of the end product, they have no claim on the product itself; and receive a small percentage of its’ profits. The bulk of the profits go to the owners, administrators and investors respectively. It is a common Marxian argument that the profit should be distributed more relatively evenly. More recently, democratization of economics has been popularized by George Orwell with his support for Democratic Socialism. This is a more bottom up form of Socialism as opposed to the common expectation of the top down influence that tends to occur. One major criticism that might be relevant is that top down influence… tends to occur.
Though Marxian argumentation appeals to our natural sensibilities, it is not necessarily ontological. The work of John Nash in Game Theory sparked interest in the behavioral sciences. The political scientist Robert Axelrod tested game theoretical behaviors against the naturally occurring behaviors of a distribution of various biological systems; that range from microbial fruiting bodies, to fish, to rodents and even to humans. It was found that there was a natural predisposition toward egalitarian outcomes in all of the biological systems observed. This was of course an interesting outcome; considering its’ focus.
Advancements in technology have produced not only great rewards with respect to the standard of living, but also great costs in research and development. For instance, until recently, only nation states could generate enough currency to research and develop a project like a space program. Now large corporations have opportunities to get involved in such endeavors. This is something that is out of the range of small businesses and COOPs. Many high technological endeavors are not attainable without large sums of funding. This suggests that Egalitarianism could only play a small role in future economics. A number endeavors that are likely to persist just have enormous costs even though they have greater dividends. This suggest that Egalitarianism not only isn’t necessarily economically viable; but also its’ economic viability is questionable in our future specifically.
The basics of Marxian Economics are obvious to the heuristics of even the simplest of organisms. This suggests that Marxian arguments are impulsive as opposed to ontological. Marxs’ arguments and Game Theory are both natural predispositions. This is useful because it’s an observation that is to be expected; but this isn’t to say that it is an answer to our economic issues.
Lack of General Coordination:
Neither Capitalism nor Socialism are generally purposeful enough to result in general economy. They are both truncated in specific issues; and thus self-limiting in their influence. They are both likely to be a small part of a whole in future economic models. This is probably because of lack of general coordination that results not only in the creation of economic issues, but also decreased coherence in economic inference.
They both lack understanding of and accounting for the feedback loop of environmental influence. This is probably a significant issue with respect to our own environmental influence as our population continues to increase. Neither have models for addressing carrying capacity or our influence on climate.
Neither have the dynamics to attend to technological advancement. At this point in time, technological advancement has the potential to result in a large amount of change through innovation; that is probably going to accelerate, as observed in the whole of recorded history. This has already produced issues with our own understanding of Socioeconomics; for instance. The Internet has questioned our understanding of what is public and private with the advent of virtual spaces. This has created an area that is gray to this very day. Also, both Capitalism and Socialism are focused on politics and finance. This prevents them from accounting for the acceleration of frequency of crises; and the inevitable deprecation of currency systems.
It seems clear that modern risk factors insist on fundamental economic change. Neither Capitalism nor Socialism are suited to addressing the socioeconomic issues that were are even now facing; much less the ones that are projected for the future. Of course, outside influence could, in principle address these issues; however they would be likely to become part of the social heuristic, being significant enough to be effective. This may suggest that fundamental change is inevitable; and thus is likely to replace both models.