Adam Smith

Adam Smith - 12-9-07 History Prof. Carroll Adam Smith is...

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Unformatted text preview: 12-9-07 History Prof. Carroll Adam Smith is clearly leaning towards consumer support in his essay. He claims that domestic monopolization is hurting the country by restricting the sale of goods to only those which have been made domestically. This hurts the country because these domestic manufacturers are able to charge whatever they wish for the good which hurts the consumer. However, by lifting these trade barriers and allowing for international trade, the price of certain goods will go down and perhaps the quality may go up. If we consider for example grapes being grown in France to the quality of Grapes being grown in Britain, there is a substantial difference. So in some cases you will have a good at a cheaper price and also the possibility of having a better good since it may be better suited grown in a different country. Ultimately, by increasing competition by allowing international trade, manufacturers will combat one another by lowering the cost which will benefit the consumer. This is going on the assumption that the prices set when a good has been monopolized are greatly exaggerated, thus even when the price of the good is lowered to compete against foreign competition, a profit is still made by the manufacturer. Smith does admit that some tariffs can be necessary in drastic cases; however, for the overall better of the countrymen/consumer, allowing foreign trade is the way to go according to Smith. ...
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This note was uploaded on 04/08/2008 for the course HST 101 taught by Professor Thiery during the Spring '08 term at Iona.

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