The great Adam Smith provides an example of how being a classical liberal is no guarantee of getting things right all the time. While he certainly got the system of liberty right, he was nonetheless not free from grave error in other matters.
Inter alia, Adam Smith did not understand that the worth of a good is subjectively determined, rather than inhering in it as an objective quality. This is a key insight of the innovative marginalist economists of the 1870s.
Incidentally, while the worth of a good is subjectively ascertained, its price reflects objective factors as well, e.g. the number of buyers and sellers, and their offers and bids, the amount of demanded resources available etc. The interplay of subjective and objective factors incorporated in prices gives rise to an objective test: the profit-and-loss-system, which ensures that the means of production are left in the hands of those who come closest to serving the most urgent demands ( = highest preferences) of consumers, i.e. those adept at offering consumers what they are most willing to spend their money on, at prices that cover the vendor's costs.
The marginal revolution - and thus much of what we consider valuable in economics after Smith - emerged during Marx's lifetime. However, Marx missed it and instead of learning the all-important marginalist lesson, he copied Adam Smith's labour theory of value, only to get into irresolvable difficulties over finding a way of measuring the supposed objective value of a good - for more on this question see the The Dramas of Value.
But what does it matter to Marxists and congenial minds; after all, socialism is a philosophy that serves to veil the greed of its adherents. Truth is no concern to those whose particularistic point of view defines "social justice".
As I like to say, if your are greedy and you want to steal under the cloak of legitimacy, do not go into business, go into politics.
I hasten to add, the only way to stop an excess of bad politics is to go into politics and fight for a less politicised world.
George Reisman discusses another major blunder that Marx adopted from Smith, namely:
... the belief that the original and primary form of labor income is wages, with profits appearing only later, with the emergence of capitalists and their capitals, as an unearned, unjust deduction from wages.
The truth is that the income of workers producing and selling such things as pairs of shoes and loaves of bread in Smith’s “original state of things,” or in Marx’s equivalent “simple circulation,” is not wages. It is sales revenue. And precisely because there are no capitalists and thus no expenditure of money for the purpose of bringing in the sales revenues, there are no money costs to deduct from those sales revenues. Thus, the whole of the sales revenues is profit. Profit is the original and primary form of labor income.
What capitalists and their buying for the sake of selling are responsible for is not the existence of profit, but the existence of wages and the other costs of production, and thus a reduction in the proportion of sales revenues that is profit.
And just as Columbus, and not his crew, is given primary responsibility for the discovery of America, so it is businessmen and capitalists who are the primary producers in modern conditions. Profit is the income of their, mainly intellectual labor.
that contrary to Smith, Marx, and the prevailing state of public opinion, a profound harmony of interests exists between wage earners and capitalists. Capitalists not only earn their incomes, but in the process benefit everyone else. They pay wages and use their wealth in the production of ever more and better products that the wage earners can afford to buy. The more and bigger the capitalists, the greater is the demand for labor and the larger the supply of products. Everyone’s actual self-interest lies with the capitalists being free to earn the profits they richly deserve and use them to accumulate as much wealth as possible, for that wealth serves everyone who sells his labor and buys products.