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From Adam Smith to Karl Marx The Wealth of Nations and Das Kapital

Marxist Analysis · 2026-05-13

Core Argument

This article argues that Adam Smith's The Wealth of Nations and Karl Marx's Capital belong to the same intellectual lineage — that of classical political economy — and that Marx did not reject Smith's project but completed it. The central thesis is that Smith's labour theory of value, despite its inconsistencies and bourgeois limitations, laid the scientific groundwork that Marx would later transform into a revolutionary critique of capitalism. The article claims that bourgeois economists today have abandoned Smith's most important contribution — the labour theory of value — in favour of subjectivist and apologetic theories, rendering them incapable of explaining capitalism's recurrent crises. Marx's breakthrough — distinguishing labour from labour-power — solved the riddle of profit that had confounded Smith and Ricardo, and demonstrated that exploitation, class struggle, and crisis are not accidents of capitalism but necessities flowing from its fundamental laws.

Theoretical Grounding

The analysis draws on Marx's own assessment of classical political economy, particularly his treatment of Smith in Theories of Surplus Value and the afterword to the second German edition of Capital. The article situates itself within the Marxist tradition that treats the labour theory of value as the foundation of all serious economic analysis, following Engels's introduction to Wage Labour & Capital and Trotsky's introduction to Capital. It distinguishes sharply between the scientific kernel of classical political economy — the attempt to discover the objective laws governing capitalism — and the "vulgar economics" that replaced it once the bourgeoisie no longer needed a science of its own system but only an apology for it. The article deploys the distinction between labour and labour-power as the decisive theoretical advance that broke the impasse of classical economics, and uses the concepts of socially necessary labour time, surplus value, and the law of value to explain both Smith's achievements and his limitations.

Conjunctural Relevance

The article is explicitly timed to the 250th anniversary of The Wealth of Nations (9 March 1776), published in March 2026. It connects Smith's theoretical legacy to the current conjuncture by arguing that the capitalist system is "plunging deeper and deeper into an insoluble crisis, with bubbles, debt, and war all wreaking havoc on the world economy." The article draws a direct line from Smith's confusions about value to contemporary bourgeois arguments that blame workers for inflation through the "wage-price spiral" narrative, and to the left's inadequate response of "greedflation" — both of which, it argues, stem from the same failure to understand the objective determination of value by socially necessary labour time. The piece positions itself as an intervention against the free-market libertarians who claim Smith as their patron saint, arguing that Smith would reject their subjectivist economics and their inability to explain periodic crises.

Where the Argument Continues

The article is a synthetic overview that points outward to several bodies of work. It references Marx's Capital (three volumes), Theories of Surplus Value, and Contribution to a Critique of Political Economy as the essential texts for understanding the labour theory of value. Engels's introduction to Wage Labour & Capital is cited for the distinction between labour and labour-power. Trotsky's introduction to Capital is quoted at length. The article's treatment of vulgar economics connects to broader Marxist critiques of marginal utility theory and the Austrian School. Readers seeking the full development of the argument about crisis should turn to Marx's treatment of the tendency of the rate of profit to fall in Capital Volume III, and to the IDOM corpus on overproduction crises. The article's political conclusion — that capitalism cannot be reformed but must be overthrown — points toward the Revolutionary Communist Party's broader strategic orientation.

Connections

  • Marx, Capital Volume I — for the full development of the labour theory of value, the distinction between labour and labour-power, and the concept of surplus value
  • Marx, Theories of Surplus Value — for the detailed treatment of Smith and Ricardo that this article summarises
  • Engels, Introduction to Wage Labour & Capital — for the clearest short exposition of the labour-power distinction
  • Trotsky, Introduction to Capital — quoted at length in the article's conclusion
  • IDOM articles on inflation and crisis — the article's brief treatment of wage-price spiral and greedflation arguments connects to a wider body of Marxist analysis of contemporary economic debates
  • Marx's afterword to the second German edition of Capital — for the passage on the "knell of scientific bourgeois economics" and the rise of vulgar economy

Key Quotes

  1. "It was an immense advance when Adam Smith rejected all restrictions with regard to the activity that produces wealth. For him, it was labour as such, neither manufacturing, nor commercial, nor agricultural labour, but all types of labour." (Marx, quoted in the article)

  2. "The rock upon which the best economists were stranded, as long as they started out from the value of labour, vanishes as soon as we make our starting point the value of labour-power." (Engels, quoted in the article)

  3. "With Smith, both these methods of approach not only merrily run alongside one another, but also intermingle and constantly contradict one another." (Marx, quoted in the article)

  4. "It was thenceforth no longer a question whether this or that theorem was true, but whether it was useful to capital or harmful, expedient or inexpedient... In place of disinterested inquirers there stepped hired prize-fighters; in place of genuine scientific research, the bad conscience and evil intent of apologetics." (Marx, afterword to Capital, quoted in the article)

  5. "The laws which govern the various spheres of capitalist economy — wages, price, land, rent, profit, interest, credit, the stock exchange — are numerous and complex. But in the final reckoning they come down to the single law that Marx discovered and explored to the end; that is, the law of labour value, which is indeed the basic regulator of capitalist economy." (Trotsky, quoted in the article)

  6. "Marx's economic teaching is a child of classical economics, a child whose birth cost its mother her life." (Rosa Luxemburg, quoted via Trotsky in the article)