Adam Smith and the Principle of the Mercantile System

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Adam Smith and the Principle of the Mercantile System

Adam Smith wrote that commerce in Europe, but more specifically Great Britain, went from a system where the producers changed to adapt to what the consumers needed, to a system where the producers would try their hardest to corner the market, and in that, would leave the consumers with a mediocre product. In response to tightened importation laws, he wrote that a strong foreign trade system would be the only way to provide good products to the English public. Adam Smith was accurately seeing the future of the world’s commerce. He saw that as producers tried to make more and more money, they were forced to cut corners. This resulted in products that were worse than they could be. He knew that the way to improve product quality in Great Britain was to import goods from other counties.

When looking at almost any “first-world” country, you can see that the country is not a producing country, but rather a servicing country. Production of goods in the United States has dropped tremendously since the 1950’s, and services have taken over. A perfect example is in the production of televisions. In the early days of television, GE made all of the US’s televisions in the US itself. Now, there is not one television made anywhere but Japan. Now, in the US, the main product is not a television, but rather a service, what is broadcast on that television. Adam Smith predicted that with local products getting worse, foreign products would be necessary, and that if Britain did not start abolishing the prohibitions on importation, those products definitely would get worse.

It discourages the exportation of the materials of manufacture, and of the instruments of trade, in order to ...

... middle of paper ...

...change.

Smith may have been trying to preserve the old way of life, but that isn’t to say that he just wanted things the way they used to be. His profession was an economist; he knew what he was talking about. He saw where things were going, provided commerce continued in this fashion. And he was right. You can look at any European country, or the US (which could be considered an extension of Europe), and you can see that commerce is a very warped business. If you go to a store now, you will find products that have been made in the absolute worst conditions, by people who get an outrageously small amount of money, and with materials that are the cheapest you can find. Is any of this to benefit the consumer? No, because the prices are still high, it is only so that the producer can make more money.

Bibliography:

Smith, Adam; The Wealth of Nations 1776

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