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Essay Adam Smith Principles Of Business And Economics
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This is an essay about the theories of Adam Smith. This essay is an assignment for the course Principles of Economics and Business 1.
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The Brexit compared with the ideas of Adam SmithIn the year 2020, Brexit became official. If it was a good choice not to participate in the
European Union anymore, are we going to see it in the future, but we can compare this
movement with ideas from the past. In this Essay, we’re going to look at the advantages and
disadvantages of Brexit based on Adam Smith’s ideas. Adam Smith was a Scottish economist
and philosopher who wrote a book called: “The Wealth of Nations”. This book is about the
overall economy and Adam Smith talks about his vision on this economy and his ideas about
it. Nowadays, the ideas of Adam Smith are still important with today’s movements in the
economy. That’s why we can use his ideas in this Brexit topic. For example, I wondered how
Adam Smith would have felt about Brexit if it had happened when he lived.
The first advantage of the European Union talked about in this essay are the trade
agreements between the countries within the European Union. Due to these agreements
trading between countries within the European Union is possible without any restrictions.
The Brexit has caused these agreements to expire because England is no longer part of the
European Union. The most discussed topic in Adam Smith's book is specialization.
Specialization means that an employee gets better at his or her job when the employee can
focus on a small part of the total process. The process will eventually speed up when each
employee can complete his or her task faster. According to Adam Smith, specialization can
ensure acceleration of processes and can ensure cheaper processes. Due to the specialization,
people will get more dependent on each other as people will focus on their market and job.
This is called opportunity cost. The opportunity costs will rise because of Brexit. By breaking
large trade lines, the opportunity costs get higher and higher. Great Britain must specialize in
several things at once because they can no longer benefit from the European trade
agreements.
The next topic talked about in the book of Adam Smith is trading. Due to the Brexit,
England made their trade area smaller and thus the possibility to trade with other countries.
However, Adam describes another, more ineffective way of trading. This way of trading is
called begging. For begging, the other countries must want to do England a favor. With the
exit of the European Union, England has issued a negative signal to the other countries. This
is not to the advantage of England. Other countries will think more deeply before the
countries do England a favor. In Adam Smith's time, there had to be reasonableness, you
always had to exchange something for something else.
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