Economists -- Great Britain -- Biography; Smith, Adam, 1723-1790
The second case of doubt was merely one of expediency—whether free trade
should be introduced quickly or slowly. “In what manner the natural
system of perfect liberty and justice ought gradually to be restored”
Smith left to the wisdom of future statesmen and legislators to
determine. But he maintained that the evils attending the remedy were
usually exaggerated, and this view proved to be correct when Sir Robert
Peel and Mr. Gladstone effected the transformation by five mighty
strokes of the fiscal axe.
We have now examined all the passages which could give colour to the
impression that Smith was only a free trader—on conditions. That part of
the task is easy enough. The difficulty begins when we seek positive
arguments against protective or differential taxation. The woodman of
Mount Ida was not more embarrassed in choosing a tree to fell. The
_Wealth of Nations_ is a forest of full-grown arguments for free trade.
The more one reads it, the more irresistibly is one driven to the
conclusion that the science of political economy, as established in this
masterpiece, is inextricably bound up with the doctrine of free trade.
Every assumption and conclusion, his criticisms of previous and existing
theories, laws, customs, and opinions, his surveys of the commercial and
colonial policy of Europe, all bear us directly or indirectly to the
same goal. Yet there is one principle which seems to take precedence in
the argument. In the division of labour, Smith found a key to the growth
of wealth and to the enlargement of the material comforts that are
necessary to the progress of refinement and civilisation. The division
of labour is therefore his starting-point, and instead of leaving it
where Plato and Aristotle let it rest—a barren formula of economic
society—he sets it vigorously in motion, and converts it, as it were,
from a slumbering lake into a vast reservoir that irrigates and
fertilises the whole plain of inquiry. And had he been confined to one
argument for free trade, this is probably the one he would have adopted.
If we were asked to select that passage in the _Wealth of Nations_ which
gives most succinctly the broad objections to a protective policy, we
should turn to the second chapter of the fourth book, “Of restraints
upon the importation from foreign countries of such goods as can be
produced at home.” He begins by admitting that high duties or
prohibitions can secure to home producers a monopoly of the home market.
At that time British graziers enjoyed the monopoly of providing the home
market with butcher-meat. The manufacturers of wool and silk were
equally favoured, and the duties on foreign linen, for which Hume had
pleaded in one of his commercial essays, had lately been raised.
Public-domain text, read in full here on John Shaqi.
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