Nice that you point out the overlap of Smith and Marx. Stark opposition of ideologies usually fades when you actually read the founding texts. Which I haven't in this case, admittedly. So maybe you can help me here. Were Marx and Engels (themselves members of the elite if I am not mistaken) serious about the dictatorship of the proletariat? It seems so obvious that a ruling elite will emerge no matter what (as of course indeed happened disastrously in Communism). Perhaps the real protagonist here is the spectre of Progress, which of course used regimes of both socialist and capitalist persuasion to come into its own, wiping out traditional ways of life as it came.
Discussion
Oh yeah they were serious. They observed how economic relations influenced political structures and concluded that if the working class with their sheer numbers rose up and replaced the bourgeois governments with a government of their own, they as the workers while acting in their self interest would democratize the economy and the State would no longer be needed, and eventually whither away like a vestigial organ. They thought that because industrialization had so concentrated human life as well as the economy, it had also created a common self interest among the majority of the population that would prove stronger than individualistic greed. While this was ultimately proven false I personally don't think it was inevitable. Intense power struggles both within the Communist Party and between capitalist and socialist nations prompted a strategic battle which had huge implications for the results of the socialist experiment. Espionage, color revolutions, and the Cold War at large twisted the paths both East and West would take. I think theres much to learn, both from the texts on political economy from Marx and Engels as well as the theories on realpolitik by figures like Lenin and Mao, that could enrich our perspective in the world we find ourselves in. (And yes Marx and Engels were not themselves proletariat, as academics they lived in a tidepool downstream of the productive economy and this subclass they named petit-bourgeois.) And yeah I agree our progress of a species transcends the dichotomy of capitalism vs socialism. I view individualism and western capitalist democracy as the other side of the coin, molded into a dangerous and inhibiting dogma by the heightened anxieties of the 20th century much like socialism was.