Table of Contents
Introduction and Overview
The fundamental obkectives of Adam Smith’s book, The Wealth of Nations was to create a fresh appreciation of economics. The book is largely viewed as the foundation of modern day capitalism. Evidently, Smith dedicated his time in developing the notion of labor division and explains how it complements to the wealth of a society by producing vast oversupplies that may be bartered among members. Labor divisions also encourage technological invention by according certain tasks intense focus and permitting workforces to brainstorm methods to perform these tasks efficiently. Increasing efficiency has the effect of further growing surpluses. According to Smith, these surpluses can either be reinvested or traded. Technology has the capacity to improve efficiency and thus surpluses.
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Smith also conceived the notion of gross domestic product. GDP has since become vital to contemporary economics. A nation’s wealth is improved by increasing the industrious ability by market expansion to increase trade and not by hoarding metals. A significant subject that perseveres through the work is the knowledge that the economic system is automatic, and, can self-regulate when left with extensive freedom. The capacity to self-regulate and to make sure that efficiency is maximized is done by an invisible hand. However, this process is susceptible to tax preferences, lobbying groups, monopolies and various privileges allowed to members of the economy and not others. Lastly Smith defines what he contemplates to be the suitable roles of government, such justice, defense, the maintenance and creation of public works that support education, commerce, the preservation of sovereign dignity, actions that are funded by clear and fair taxation (Smith 13).
Capitalism in Bangladesh
If Smith visited Bangladesh today, he would be impresses by the way Bangladesh has defined and actualized their Capitalism system by putting emphasis in three key factors namely private ownership, of the components of production such as labor, land, management and capital and lastly all operation are geared to making profits. Bangladesh has perfected free market economy, which advocates for privately owned production which is directed and income disseminated largely through market operations. Bangladesh has been voted as one of the countries in South Asia most supportive of the free market, and the most free-market, trade-oriented country.
To emphasis its commitment to free market economy, Bangladesh is a dynamic associate of the World Trade Organization (WTO) from its launch. Bangladesh is also a member of most regional and consensual free trade treaties that include Pakistan-Bangladesh Free Trade Agreement, the Bay of Bengal Initiative for Multi-Sectorial Technical and Economic Cooperation (BIMSTEC) Free Trade Area, Asia-Pacific Trade Agreement (APTA), South Asian Free Trade Area (SAFTA), regional and bilateral free trade agreements including, Trade Preferential System of the Organization of the Islamic Conference (OIC PTA), and Preferential Tariff Arrangement-Group of Eight Developing Countries (D-8 PTA).
Smith would also be very impresses by the Bangladesh efforts to improve infrastructure and support education to create a good environment for commerce. Bangladesh has identified the importance of sound infrastructural foundation as key factor in order for the country to keep pace with the growing economy and trade. The country continues to invest heavily on infrastructural development as demonstrated by the huge financial allocation in the budget. Bangladesh well-knit communication and transport system linking the country’s region is critical to sustaining its capitalist policies.
However, Smith might not like the increasing social disparity that has been introduced by capitalism. Bangladesh specific socioeconomic situation has brought about a condition where the rich are getting richer while the poor are losing their current wealth due to diverse socioeconomic factors. The labor and low-income people can no longer afford healthy foods. A malnourished labor will impact negatively on the capitalist policies.
Smith will be shocked at the monopolistic nature of the various sectors of the economy (Mostafa 1-5). Sectors such as rail transport, telecommunication, air, gas and electricity which are key pillars of the economy have been characterized largely by the existence of single national suppliers, greatly curtailing competition and giving customer little leeway in their choices and making admission of possible challengers difficult.
Smith’s Critique of Bangladesh Capitalism
Bangladesh started practicing capitalist policies only recently. It would therefore be harsh to expect it to have achieved a flawless system in such a short time. After coming from many years of mismanaged socialist system that endeavored to enrich a few of its citizen at the expense of the majority in the population, Bangladesh has done better under the circumstance. Economy sector should be quickly liberalized to offer consumers more choice and enhanced quality service. The policies on free market and infrastructure largely reflect those advanced by Smith
Capitalism today has been challenged in numerous grounds, particularly for the sincere limitations of definite types of capitalist society and the dissimilarity that has come about between the poor and the rich. The ethics of capitalist systems has also been questioned. Neo classical philosophy has given traction to a narrow idea of capitalism that has mainly omitted moral and social concerns from economic values. Such forms of narrow notion of capitalism that excluded broader moral inspirations and traditions in their economic thinking has barred capitalism from achieving its full latent.
- Mostafa, S. M. G., et al. “A prospective model of Bangladesh electricity market.” Innovations in Science, Engineering and Technology (ICISET), International Conference on. IEEE, 2016.
- Smith, Adam. “Capitalism and consumer sovereignty.” Morality and the Market (Routledge Revivals): Consumer Pressure for Corporate Accountability (2014): 13.