Describe Why The Discovery Of America Was One Of The Most Important Events Recorded
Describe why the "discovery" of America was one of the "most important events recorded in the history of mankind," according to Adam Smith?
Although Adam Smith does say that the discovery of the Americas (along with the discovery of a trade route around Africa to Asia) was one of the “greatest and most important events recorded in the history of mankind,” he really means that it was one of the most important events in terms of its impact on Europe. He appears to be guilty of Eurocentrism, saying that an event that was important for Europe was important for all of mankind.
Smith’s main point is that the discovery of the Americas had a huge impact on the economy of Europe. Smith argues that all of the countries of Europe were impacted by the discovery of the Americas. He says that there are three kinds of countries in Europe, each of which has a different economic relationship with the Americas. The first type of country is the country that trades directly with the Americas. He lists Spain, Portugal, France, and England as the examples of this type of country. Second, there are countries whose goods go to the Americas through intermediaries. These countries sell goods to the four countries mentioned previously and those countries export the goods to the Americas. Finally, there are countries whose goods never end up in the Americas but who are affected by the Americas nonetheless. These countries, such as Poland, have to produce goods that they can sell to other countries in order to buy American goods. If people in Poland want sugar, for example, they might have to produce goods that they can sell to Spain, thus enabling them to buy American sugar. All of these countries are impacted by the discovery of the Americas.
Smith says that the discovery of the Americas was extremely important because it opened up new economic opportunities for European countries. He says that the countries of Europe “have now become the manufacturers for the numerous and thriving cultivators of America.” Because the discovery of America allowed this to happen, it is (to Smith) one of the most important events in human (this probably ought to be "European") history.
Adam Smith’s An Inquiry into the Nature and Causes of the Wealth of Nations devotes a great deal of space to the economic ramifications of the discovery and exploitation of North America, specifically, of Britain’s American colonies. In Chapter VII, Part Three of his examination of economics, titled “Of the advantages which Europe has derived from the Discovery of America and from that of a Passage to the East Indies by the Cape of Good Hope,” Smith considers the macroeconomic effects of the opening of new markets, new sources of labor, and new trade routes on Europe with an understandable, given Smith’s nationality, emphasis on Great Britain.
Among Smith’s main points is how the discovery of natural resources like gold and silver mines in America in the 16th century had the effect of reducing the prices of such commodities because of their suddenly increased availability. The decrease in commodity prices, even of precious metals like gold and silver, diminished the value of money which, in turn, positively affected the value of those same commodities. At the same time, the value of labor in England was lower than in the North American colonies, where wages remained high. The cost of “provisions,” ironically, was lower in the colonies than in England. These dynamics were not unique to the colonies; Smith also notes similar effects from the discovery of mines in Peru, as well as mines in Cuba and elsewhere in the Americas.
In short, Smith’s suggestion that the discovery of America was among the most important developments in history is a bit of an exaggeration when one examines the scope of his work. His rhetoric notwithstanding, the underlying sentiment was actually pretty accurate.