US Immigration from Adam Smith’s Perspective
Adam smith was an economics philosopher who wrote the book, “The Wealth of Nations” in the 17th century. In his book, he discusses several factors that affect trade and provides his views on why some countries are more productive than others. This essay highlights some of the issues discussed in Adam Smith’s book.
In the first chapters of his book, Adam Smith talks of the division of labor. The division of work is a significant factor in the increase in the production of goods. During smith’s time, it was easy to control the division of labor in agriculture than in manufacturing industries. This made both types of nations (rich and poor) to have a level ground in terms of agriculture than in manufacturing industries (Burstein 125). Don't use plagiarised sources.Get your custom essay just from $11/page
Smith also discusses the productivity of free markets in his book. One of the original ideas in “Wealth of Nations” is the issue of free trading. Free trading occurs when there are no restrictions on the services or goods being produced by the people. However, governmental rules that impose restrictions such as taxes and importation duty have affected the freedom of traders for many centuries. Most of the charges and duties levied on goods causes the prices of those particular goods to be hiked. The result is usually fatal. The taxes levied always limits production and profits for the traders. Smith suggests that if governments were to let their hands off the trading sector, life would be more susceptible to all traders, including the poor people. The absence of taxes and duties on products will allow traders to produce goods that meet the demands of the market. Therefore, the productivity of assets highly depends on governmental policies.
Smith also highlights variations in the supply and demand for unskilled labor. There are several reasons for these variations. Smith says that wages of laborers are dictated by competition between and among laborers and employees. When employees compete for limited job opportunities, the wages fall. When employers compete for the workforce, the salaries of the employees rise.
Also, when employees don’t compete for job opportunities, their wages rise while when employers don’t fight for laborers, the wages fall (Jones & Ronald, 233). Smith argues that if a country has more laborers than the job market requires, the competition among employees is higher. Therefore, wages fall. However, if companies make much revenue, the salaries of the employees may rise. Smith also notes that the number of receipts of the company must stay high so that the wages of the employees may be high as well (McGovern). This means that the salaries of employees depend on the amount of revenue the company collects.
The international trade of goods creates a platform where all the traders gain. It may seem confusing because various nations have different values of duties imposed on goods. All countries that participate in this kind of trade leave better off than before. This is because people have different needs, and the distribution of resources is not equal among nations.
Both tariffs and Quotas have impacts on international trade. However, duties bring the country some revenue, while quotas take income to another country. The US immigration policy serves as a sort of trade regulation to increase labor rates. A study conducted in 2014 claims that the wages of a country would increase by 2.5% if there were a 10% emigration supply shock.
Work Cited
Burstein, Ariel, and Jonathan Vogel. “International trade, technology, and skill premium.” Journal of Political Economy 125.5 (2017): 1356-1412.
Jones, Ronald W., and Henryk Kierzkowski. “The role of services in production and international trade: A theoretical framework.” World Scientific Book Chapters (2018): 233-253.
McGovern, Edmond. International trade regulation. Vol. 1. Globefield Press, 2018.