AN INQUIRY INTO THE NATURE AND CAUSES OF THE WEALTH OF NATIONS.
By Adam Smith
PART II.--Of the Unreasonableness of those extraordinary Restraints,
upon other Principles.
In the foregoing part of this chapter, I have endeavoured to show, even
upon the principles of the commercial system, how unnecessary it is to
lay extraordinary restraints upon the importation of goods from
those countries with which the balance of trade is supposed to be
disadvantageous.
Nothing, however, can be more absurd than this whole doctrine of the
balance of trade, upon which, not only these restraints, but almost all
the other regulations of commerce, are founded. When two places trade
with one another, this doctrine supposes that, if the balance be even,
neither of them either loses or gains; but if it leans in any degree to
one side, that one of them loses, and the other gains, in proportion to
its declension from the exact equilibrium. Both suppositions are false.
A trade, which is forced by means of bounties and monopolies, may be,
and commonly is, disadvantageous to the country in whose favour it is
meant to be established, as I shall endeavour to show hereafter.
But that trade which, without force or constraint, is naturally and
regularly carried on between any two places, is always advantageous,
though not always equally so, to both.
By advantage or gain, I understand, not the increase of the quantity
of gold and silver, but that of the exchangeable value of the annual
produce of the land and labour of the country, or the increase of the
annual revenue of its inhabitants.
If the balance be even, and if the trade between the two places consist
altogether in the exchange of their native commodities, they will, upon
most occasions, not only both gain, but they will gain equally, or very
nearly equally; each will, in this case, afford a market for a part of
the surplus produce of the other; each will replace a capital which had
been employed in raising and preparing for the market this part of the
surplus produce of the other, and which had been distributed among, and
given revenue and maintenance to, a certain number of its inhabitants.
Some part of the inhabitants of each, therefore, will directly derive
their revenue and maintenance from the other. As the commodities
exchanged, too, are supposed to be of equal value, so the two capitals
employed in the trade will, upon most occasions, be equal, or very
nearly equal; and both being employed in raising the native commodities
