Adam Smith on the Economic Difference Between Europe and Pre-Colombian America

Adam Smith on the Economic Difference Between Europe and Pre-Colombian America

Adam Smith explains why Europe was economically stronger than the Pre-Colombian peoples of America.

All the ancient arts of Mexico and Peru have never furnished one single manufacture to Europe (p. 162).

Good point. Pre-Colombian America had a wealth of architectural achievements: Machu Pichu, Tikal, etc. Yet when it came to trade, they manufactured nothing. Their wealth came from the land, via gold and tropical fruits. And they were able to expand their empires via war. Yet they never created a notable product that was bought and sold in foreign markets.

Today, we can see the wealth of nations in a similar way. What nations are manufacturing items? America, Japan, Germany…these are the wealthy countries. Conversely, most of the poor nations—like Haiti or Bolivia—manufacture nothing. Have you ever seen a Haitian or Bolivian car for sale? What about a refrigerator?  Or a stereo? You get my point.

Manufacturing requires great skill. It indicates a society that, at its base, is highly developed:

  • Intellectual skill: the ability to create a new item: car, refrigerator, etc.
  • Organizational skill: the ability to create many of the items in question via factories
  • Distribution skill: the ability to disseminate the item throughout the culture and world

Manufacture is more than a word – it shows the greatness of a people. It highlights a nation that’s dreaming bigger, that’s pushing farther. It requires the genius of the inventor and the integrity of a people. And make no mistake about it…the eyes of the world are centered on the nations that manufacture goods.

For a link to the book, see the following:  Wealth of Nations PDF