Adam Smith, a Scot and a philosopher who lived from 1723 to 1790, is considered the founder of modern economics.

In Smith's time, philosophy was an all-encompassing study of human society in addition to an inquiry into the nature and meaning of existence. Deep examination of the world of business affairs led Smith to the conclusion that collectively the individuals in society, each acting in his or her own self-interest, manage to produce and purchase the goods and services that they as a society require. He called the mechanism by which this self-regulation occurs the invisible hand, in his groundbreaking book, The Wealth of Nations, published in 1776, the year of America's Declaration of Independence. While Smith couldn't prove the existence of this hand (it was, after all, invisible) he presented many instances of its working in society. Essentially, the butcher, the baker, and the candlestick maker individually go about their business. Each produces the amount of meat, bread, and candlesticks he judges to be correct. Each buys the amount of meat, bread, and candlesticks that his household needs. And all of this happens without their consulting one another or without all the king's men telling them how much to produce. In other words, it's the free market economy in action. Not much is known about Smith's personal views beyond what can be deduced from his published articles. His personal papers were destroyed after his death at his request. He never married, and seems to have maintained a close relationship with his mother, with whom he lived after his return from France and who died six years before his own death. Smith had studied the economic models of the French Physiocrats for many years, and in this work the invisible hand is more directly linked to the concept of the market: specifically that it is competition between buyers and sellers that channels the profit motive of individuals on both sides of the transaction such that improved products are produced and at lower costs. Smith, who is often described as a prototypical absent-minded professor, is considered by historians to have been an eccentric but benevolent intellectual, comically absentminded, with peculiar habits of speech and gait, and a smile of "inexpressible benignity". He was known to talk to himself, a habit that began during his childhood when he would speak to himself and smile in rapt conversation with invisible companions. He also had occasional spells of imaginary illness, and he is reported to have had books and papers placed in tall stacks in his study. We all know Adam Smith was well known for his invisible hand theory as we read from above he lived a very boring life that suggested he was more of a loner considering the fact that he never had much of a personal relationship with anyone

close to him. This could be one of the reasons that drove him to write and research about world economics and pushed him to write books and prove theories.

Karl Marx Karl Marx, a German economist and political scientist who lived from 1818 to 1883, looked at capitalism from a more pessimistic and revolutionary viewpoint. Where Adam Smith saw harmony and growth, Marx saw instability, struggle, and decline. Marx believed that once the capitalist (the guy with the money and the organizational skills to build a factory) has set up the means of production, all value is created by the labor involved in producing whatever is being produced. In Marx's view, presented in his 1867 tome Das Kapital (Capital), a capitalist's profits come from exploiting labor that is, from underpaying workers for the value that they are actually creating. For this reason, Marx couldn't abide the notion of a profit-oriented organization. This situation of management exploiting labor underlies the class struggle that Marx saw at the heart of capitalism, and he predicted that that struggle would ultimately destroy capitalism. To Marx, class struggle is not only inherent in the systembecause of the tension between capitalists and workersbut also intensifies over time. The struggle intensifies as businesses eventually become larger and larger, due to the inherent efficiency of large outfits and their ability to withstand the cyclical crises that plague the system. Ultimately, in Marx's view, society moves to a two-class system of a few wealthy capitalists and a mass of underpaid, underprivileged workers. While Marx's theories have been discredited, they are fascinating and worth knowing. They even say something about weaknesses in capitalism. For instance, large companies do enjoy certain advantages over small ones and can absorb or undercut them, as shown by examples as old as Standard Oil (now ExxonMobil) and General Motors and as recent as Microsoft and IBM, in high technology, and ConAgra and Dole in agriculture. In addition, as we will see in Wealth and Poverty, income distribution in U.S.-style capitalism, which is a purer, less-mixed form of capitalism than that of Europe, can tend to create a two-tier class system of have's and have not's. Marx married Jenny von Westphalen in 1843. Together had seven children, but partly owing to the poor living conditions they were forced to live in whilst in London, only three survived to adulthood. Marx frequently used pseudonyms, often when renting a house or flat, apparently to make it harder for the authorities to track him down. While in Paris, he used that of 'Monsieur Ramboz', whilst in London he signed off his letters as 'A. Williams'. His friends referred to him as 'Moor', owing to his dark complexion

and black curly hair, something which they believed made him resemble the historical Moors of North Africa, whilst he encouraged his children to call him 'Old Nick' and 'Charley'. Smiths theory talks about harmony and growth whereas Karls theory discusses about discipline and struggle for capitalism. It is very clear that Karls personal life has influenced his thinking in a huge way. His struggle in life to live in poor conditions and see his children not even reach adulthood made him think about the scarcity in the world and how consumers needs and wants can affect the economy as a whole.