In this paper, it will be discussed about how would Adam Smith look a dramatically drop in Indian gold-buying market due to the interruption from government. This will first briefly introduce a description of general problem in India; then followed by a fuzzy idea of Adam Smith and a detailed presentation of what would be Adam Smith’s opinion on the news.
According to American Forbes magazine webpage, “The precious metal is second only to oil as the main culprit behind India’s trade deficit of around $11 billion.” (Accessed in Forbes website on 5/11/2013). Recently, the Diwali holiday, a traditional gold shopping season, especially jewellery, has come. However, in this year, the government put restrictions on bullion imports by considerably increasing the import tax. (The wall street journal: 8/11/2013). In a result, Indians bought about half the gold as they used to buy, cited from sellers of the precious metal. (The wall street journal: 8/11/2013). As Suresh Hundia said during the holiday, bullion and jewellery sales are estimated to fall by 60%, while the silver sales will decrease by half. (Forbes website: 5/11/2013).
Adam Smith, a Scottish moral philosopher and a pioneer of political economy, who was well-known by his two classic work: The Theory of Moral Sentiment and The Wealth of Nations. Smith is widely cited as the father of modern economics and is still one of the most influential thinkers in the domain of economics until now. (boundless.com: 8/11/2013). Based on Adam Smith’s work, “he believes that both the moral values of a society and its production emerge and are coordinated in this fashion.” (boundless.com: 8/11/2013) Moreover, he was on the opposite side of Marx, the government control for a harmony society. He claimed that free market competition produced a thriving status, and this happened without any government involvement.
In this current affair,...