Why Adam Smith and Karl Marx's ideologies aren't so relevant today

US President Donald Trump. [AFP]

Adam Smith, a Scotsman, and Karl Marx, a German, are probably the two best known political economists in the Conceptual West. They lived a few decades apart and each had profound impact on how countries and people ran their economies and politics. They both had something to say about mercantilism which Smith, in his book, Wealth of Nations, castigated as being wasteful rather than being wealth creating. To Marx, mercantilism simply prepared the way for exploitative capitalism to replace feudalism by way of the merchant class. In his pamphlet, Communist Manifesto and later The Capital, Marx called for the proletariats in the most advanced industrial states to overthrow capitalism and establish communism. It did not happen. Instead, there was a revolution in backward Russia in 1917 that established a 'communist' state. The Russian example was imitated in China whose communist party grabbed power in 1949. While Russian communism collapsed at the end of the Cold War, China grew so much that it rivals the United States in economic performance.

Neither Smith nor Marx is doing well as an ideological pace setter. Smith's free market belief disappeared under the weight of growing nativism and tariffs in both Britain and the United States, the acknowledged leaders of the capitalist system. The record in the United States is one of extreme gyrations between the politics of high and low tariffs. At present, it is on the high tariff swing with US President Donald Trump expressing his admiration for another high tariff US president, William McKinley. Trump has little interest in Smith's prescription on how to create national wealth or Andrew Jackson's desire to spread 'democracy'. Instead, Trump is in the camp of such neo-mercantilists as Peter Thiel and his idea of diluting democracy and concentrating wealth and power in the hands of a few techno-authoritarians. Thus, the world's leading capitalist country, has seemingly ditched Smith and capitalism.