Adam Smith: Mercantilism Is Enemy of the People
From the New World Encyclopedia:
"In Wealth of Nations, one senses Smith's passion for what is right and his concern that mercantilism benefits the wealthy and the politically powerful while it deprives the common people of the better quality and less expensive goods that would be available if protectionism ended and free trade prevailed."
HT: PeakTrader
9 Comments:
Sadly, most politicians are still believers of mercantilism and are under the impression that protectionism that hurts consumers will help 'the nation.'
Here is a very good recent post from the Carnegie Endowment on the subject of possible revaluation of the Chinese renmenbi. What struck me about the post was the emphasis it placed on benefits and harms to consumers in importing and exporting countries. It is amazing how many discussions of this issue are purely mercantilist in tone, considering exports or current account surpluses as aims in themselves. Thanks to you for this timely quote, and thanks to the Carnegie Endowment for a solidly Smithian analysis.
Navigation Acts
The Navigation Acts, also known as the British Acts of Trade, prevented the importation of commodities into England unless the ships were owned by Englishmen. Also all foreign goods shipped to American colonies had to go through English ports. Later, a tariff on French sugar going to the colonies prevented the purchase of cheap French sugar. The Navigation Acts hindered manufacturing development in the American colonies.
In ”Wealth of Nations” Adam Smith supported the Navigation Acts.
It would be nice if American economist were as committed to the well being of Americans as Adam Smith was to the well being of Englishmen. Sadly they are not.
better quality and less expensive
Unfortunately that is never the case. Worse quality is the reality.
It would be nice if American economist were as committed to the well being of Americans as Adam Smith was to the well being of Englishmen. Sadly they are not.
Don't try for even one moment to portray Adam Smith as approving of tariffs. He didn't. He was, in fact, the beginning of the end of their general acceptance.
Right or wrong (wrong, actually), Smith justified the Navigation Acts for supposedly strengthening the British fleet. Trade wasn't hindered, he rationalized, simply the vehicles it was transported on.
A foolish and inconsistent view.
"The Navigation Acts, also known as the British Acts of Trade, prevented the importation of commodities into England unless the ships were owned by Englishmen."
A similar US regulation, section 27 of the Merchant Marine Act of 1920, popularly known as the Jones Act, prevented foreign owned & operated dredges from building barriers to prevent oil from reaching sensitive shorelines during the recent Gulf oil spill. Can you say "unintended consequence"?
A similar US regulation, section 27 of the Merchant Marine Act of 1920, popularly known as the Jones Act, prevented foreign owned & operated dredges from building barriers to prevent oil from reaching sensitive shorelines during the recent Gulf oil spill.
Nothing prevented the foreign countries from handing the vessels to a Jones Act compliant US firm and complying with the Jones Act.
"Nothing prevented the foreign countries from handing the vessels to a Jones Act compliant US firm and complying with the Jones Act."
Why would they want to do that?
If you don't want them to build barriers, then they won't. And they didn't
Why would they want to do that?
They would do so because they want to be able to provide their experience. There would be a way to make money off that in spite of the compliance.
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