The ideas of Adam Smith

1. Mercantilism is en economic theory which stated that a nation should maximize exports and minimize imports and try to accumulate more and more gold. Adam Smith rejected mercantilism and said a nation benefits from the import of goods that other nations can produce more efficiently. Do you agree with Adam Smith or with Mercantilism? Explain using examples from your daily life in Macau.

I agree with Adam Smith because if there is only export, it will lead the country run out of resources as we all have limited resources only. Import and export run at the same time can help each country produce more products efficiently and it makes stuffs being global in the world. Even though there are disadvantages of globalization, there are lots of advantages of globalization around such as crops, clothing, food, technology, entertainment and so on. It is a big influence in our life. if there is no import, we are not able to watch the Hollywood movies or Hong Kong movies in Macau. We do not have a chance to taste the food or snacks of different countries.  There is no coca cola in Macau. I do not have the fan or air-conditioner which are made in Japan. I can only use the cosmetics that are made in Macau but Macau is not producing any cosmetics! There are lots of disadvantages and inconvenience if there is only mercantilism. It is because we do not have goods but the goods made in Macau only. What we got is only money but you are only able to use and but the stuffs in Macau. In the meanwhile, export makes other countries know Macau and have stuffs that are made in Macau likes the almond crackers or Macanese egg tarts. Therefore, we can see from our daily life in Macau how Adam Smith’s theory work success.


2. Adam Smith believed that the private sector should run businesses and that the government should limit its activities to administering justice, supporting services and national defense. In our class last Friday, we listed the many ways the government influences life in Macau. Would it be good if the government took over all the businesses in Macau? What would happen? Explain.

It would not be good when the government took over all the business in Macau because there is no competitive in the market and it is too easy for government runs out of the capitals or funds. The corruption may be getting more serious. Government should only be responsible for administering justice, supporting services and national defense. When the market in Macau fails, government should maintain the economics. What government should do is protect the society in every aspect such as economics, public security, subsidies, the fairness in the private business or government.