Analysis of Book III Chapter I of The Wealth of Nations - Term Paper Example

? Analysis of Book III Chapter I of The Wealth of Nations The success of a nation depends on numerous factors. It not just relies on a single entity which will bring economic stability for its whole population. There are factors that contribute to the success or failure of a nation. Could the wealth of the nation be its people and not the amount of reserves it has? Is it possible? Analysis of Book III Chapter I of The Wealth of Nations Adam Smith took approximately a decade before being able to finish his masterwork The Wealth of Nations. Smith still applied the law of supply and demand. However it is not purely based on the number of produce and raw materials present in a particular location. The author also pointed out the importance of human labor inputted into the manufacturing industry. His view explored the concept that labor could be the most important factor for a nation to reach success and stability. For labor to be effective in a specific industry, laborers should be skilled in terms of employment of useful labor. Produces cannot be cultivated if not for laborers who toil the soil, plant the seed and take care of the crop until it is ready to be harvested. It is from this labor that the resources can achieve stability or even go beyond its breakeven point. As Smith stated it: According, therefore, as this produce, or what is purchased with it, bears a greater or smaller proportion to the number of those who are to consume it, the nation will be better or worse supplied with all the necessaries and conveniences for which it has occasion (Smith Intro par.2) It has been more than 200 years since the book was published. However the concepts still applies and can be related to the present economic stature of a specific location. The concepts that Smith had proposed and explained are the basic principles on how to make a nation achieve stability and competence in a very unstable economy which can be considered as the present reality. Another statement that Smith made which should be internalized and enacted is that “the great commerce of every civilized society is that carried on between the inhabitants of the town and those of the country” (p.1909). A town is part of a nation. One nation will not prosper if even just one of its towns is still suffering and struggling to reach its breakeven mark. However, when a town is considered to be successful and stable, it does not necessarily mean that the whole nation is also of the same stature. A town’s success only contributes a portion towards the success of a nation. For the nation to reach its success or even its stability, it should ensure that all of its towns are of the same if not on an almost uniform stature. However, there are some nations that hide oppressed side and focus more on the prosperous side with the hope that it will further boost its success. For the town’s side on the other hand as Smith stated, “the town, in which there neither is nor can be any reproduction of substances, may very properly be said to gain its whole wealth and subsistence from the country” (p.1909). At this point, it is quite an irony that as a nation would try to hide the town which is troubled; the said town has the tendency to just depend on its nation to boost its stature and just wait and see what will happen. This is an area that a number of nations are guilty. These nations are doing this because it is easier to hide the problem rather than make an effort to solve it. Though a town is part of the nation, it does not necessarily mean that the nation will also suffer from the same burden a particular town is suffering. The nation is merely escaping from its responsibility to aid the people in the town because a successful nation will succeed or fail due to the majority of its towns and not just a couple which just happened to have experienced a down-turn. It can also go the other way. When Smith said that “the gains of both are mutual and reciprocal, and the division of labour is in this, as in all other cases, advantageous to all the different persons employed in the various occupations into which it is subdivided” (p.1909). This is not visible anymore in present day economy. Usually, a town does not gain when the nation gains. There are only portions of the nation who will gain together with it but this does not essentially mean a whole town benefits from the gain. When a particular town gains, the nation will also gain as the nation requires certain gains particular taxes that needs to be paid. It is a town’s responsibility to do what is stated by the law. A town will be responsible for the gain of the nation as the latter imposed laws to ensure its gains to fund other projects that will further boost its stature. The nation also needs labor from its town to ensure continuous gains. Labor is one the resources a town contributes to the gain of its nation. However, this does not automatically means that the labor an inhabitant is doing will aid the town since the labor can be transferred from one town to another. Smith specified that “among all the absurd speculations that have been propagated concerning the balance of trade, it has never been pretended that either the country loses by its commerce with the town, or the town by that with the country which maintains it” (p.1909). Is this statement pertaining to all of the towns or just specific ones in a nation? It is a fact that not all towns have the same fertile soil and competitive markets. There are laborers who need to transfer travel from one town to another to perform the task needed to be done for them to earn enough. The testimony that Smith stated in the latter part of the 18th century does not apply anymore to what is happening in the 21st century. Using the author’s own words, what was stated then can be considered significantly different compared to what is happening at present. Laborers also need co-laborers in a task or another. There are specific ideas and materials that a specific laborer need from another to perform his or her own task. Smith has already noticed this fact even during the 1700s as interpreted in the book: Such artificers, too, stand occasionally in need of the assistance of one another; and as their residence is not, like that of the farmer, necessarily tied down to a precise spot, they naturally settle in the neighbourhood of one another, and thus form a small town or village (p.1909). With such event been noted and stated, therefore labor is possibly made by non-local inhabitant of a particular town. The growth of the town from its produce is not from a pure local inhabitant labor. These produces are then put into market at a higher rate than a non-inhabitant local will purchase not knowing that the laborers of the said product may have come from the same town he did. Smith further elaborated on this thought when the author cites: In countries, on the contrary, where there is either no uncultivated land, or none that can be had upon easy terms, every artificer who has acquired more stock than he can employ in the occasional jobs of the neighbourhood, endeavours to prepare work for more distant sale (p.1909). The latter statement by the author justifies why there has been migration of laborers either from one town to another or from one country to another. Such transfers are brought about by the need of skills and amount of workforce required in a particular place. These migrations cannot be considered as unique events that happened during the earlier years since it is still very prominent in the present days. It would either be a particular laborer migrating temporarily until the service is needed or the laborer’s entire family will migrate to a specific location with the hope of improving their way of living. With that statement being understood, foreign commerce is the most important factor in a nation’s economy in recent years. This is due to the fact that if not for the foreign labor being acquired, the agriculture and manufacturing industry of a particular location will remain stagnant or even be brought to an end. Even though Smith have acknowledged the migration of laborers as a fact and accepted reality in the trade and market, the author then seem to contradict the facts when he made the statement, “According to the natural course of things, therefore, the greater part of the capital of every growing society is, first, directed to agriculture, afterwards to manufactures, and, last of all, to foreign commerce” (p.1909). Smith’s masterpiece has statements and thoughts which can still be related to present events. There are also statements which may have contradicted what is presently happening in the world’s economy. There are also manifestations in the author’s part as to what might alter events and priorities. “The manners and customs which the nature of their original government introduced, and which remained after that government was greatly altered, necessarily forced them into this unnatural and retrograde order” (p.1909). A particular market is also adapting to what the society is dictating so that it can survive the rapid changes which are happening in its environment. References Smith, A. (1776). The Wealth of Nations. London, UK: W. Strahan and T. Cadell. Retrieved from . Read More