Adam Smith and the Principle of the Mercantile
System
by Barry Wright
Essay: Adam Smith and the Principle of the Mercantile System
Pages: 10
Rating: 3 stars
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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 ...
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