Distribution of Wealth United States

Distribution of Wealth in the United States
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Distribution of Wealth in the United States
In the theoretical analysis of wealth sharing and distribution in an economy, Karl Marx and Adam Smith have had differing opinions regarding the manner in which income should be distributed in an economy. In his arguments, Adam Smith refers to capitalism (free market) as the most efficient method of wealth distribution. Smith explains that in an event the market forces of demand and supply are left to interact on their own without any form of government interference, they will eventually establish the income equilibrium in the economy. Similarly, Smith theoretical explanations identify capitalism as the most suitable economic model of wealth distribution (Blenman, 2017). Contrary to these opinions by Adam Smith, Karl Marx provides a critique of Smith’s capitalism idea with a distinct concept that links capitalism with income inequality and unfair wealth distribution in the economy. Marx’s rationale illustrates that in a capitalist economy the wealthier class of people will continue to become richer whereas the poor people will become poorer. In an attempt to provide a more efficient way of equal distribution of wealth, Karl Marx proposes the formation of new social order in the economy. In his theory, Marx indicates that the new social order should abolish the class segments in the society and promote collective ownership of factor of production. Both capitalist and communism concepts have important points regarding wealth distribution which I agree with.

However, in this case, Smith got it right in his capitalist argument on income and wealth distribution.
The capitalist economic system proposed by Adam Smith and the socialism idea pioneered by Karl Marx have both been put into test and scrutiny over the last few decades in various economies in the world. Smith’s capitalist concept has influenced a significant portion of the modern-day economies globally. In particular, the United States economy has excelled under Smith’s free market rationale. However, regarding wealth distribution, capitalism has worsened the inequality gap in the American economy. Based on Marx’s illustrations in his socialism theory, the rich are becoming richer whereas the poor are becoming poorer in the United States economy.
References
Blenman, J. (2017, April 19). Adam Smith: The Father of Economics. Retrieved April 04, 2018, from https://www.investopedia.com/updates/adam-smith-economics/