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nydus/An Inquiry into the Nature and Causes of the Wealth of NationsPublic

Adam Smith examines how the annual labor of a nation determines the supply of necessities and conveniences available to its population. He analyzes how the skill of the workforce and the ratio of productive to unproductive laborers influence a society's overall wealth and standard of living.

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Table of Contents

CHAPTER III. OF THE EXTRAORDINARY RESTRAINTS UPON THE IMPORTATION OF GOODS OF ALMOST ALL KINDS, FROM THOSE COUNTRIES WITH WHICH THE BALANCE IS SUPPOSED TO BE DISADVANTAGEOUS.

of England. It would give some revenue to those of England. The capital which had been employed in producing the English goods that purchased this gold and silver, the capital which had been distributed among, and given revenue to, certain inhabitants of England, would thereby be replaced, and enabled to continue that employment. The whole capital of England would no more be diminished by this exportation of gold and silver, than by the exportation of an equal value of any other goods. On the contrary, it would, in most cases, be augmented. No goods are sent abroad but those for which the demand is supposed to be greater abroad than at home, and of which the returns, consequently, it is expected, will be of more value at home than the commodities exported. If the tobacco which in England is worth only £100,000, when sent to France, will purchase wine which is in England worth £110,000, the exchange will augment the capital of England by £10,000. If £100,000 of English gold, in the same manner, purchase French wine, which in England is worth £110,000, this exchange will equally augment the capital of England by £10,000. As a merchant, who has £110,000 worth of wine in his cellar, is a richer man than he who has only £100,000 worth of tobacco in his warehouse, so is he likewise a richer man than he who has only £100,000 worth of gold in his coffers. He can put into motion a greater quantity of industry, and give revenue, maintenance, and employment, to a greater number of people, than either of the other two. But the capital of the country is equal to the capital of all its different inhabitants; and the quantity of industry which can be annually maintained in it is equal to what all those different capitals can maintain. Both the capital of the country, therefore, and the quantity of industry which can be annually maintained in it, must generally be augmented by this exchange. It would, indeed, be more advantageous for England that it could purchase the wines of France with its own hardware and broad cloth, than with either the tobacco of Virginia, or the gold and silver of Brazil and Peru. A direct foreign trade of consumption is always more advantageous than a round-about one.

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