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Quotation of the Day…

… is from pages 550-551 of Douglas Irwin’s excellent essay “Adam Smith and Free Trade,” which is chapter 32 in the forthcoming (2016) volume from Princeton University Press and edited by Ryan Patrick Hanley, Adam Smith: His Life, Thought, and Legacy (citations omitted):

Having rejected the case for restricting imports, Smith moved on to reject the case for promoting exports.  He scoffed at government efforts to increase exports through artificial methods such as bounties and subsidies, remarking that “trade which cannot be carried on but by means of a bounty” is “necessarily a losing trade.”  He explained that a country could not force other countries to buy its goods, but it could pay them (through subsidies) to buy them.  But without the subsidy, merchants would devote their resources to other activities, and therefore the effect of the subsidy would be to “force the trade of a country into a channel much less advantageous that that in which it would naturally run of its own accord.”

(The quotations from Adam Smith are all from Book IV, Chapter V of An Inquiry Into the Nature and Causes of the Wealth of Nations.)

I do not doubt that, were he alive today, Smith would be among the leaders of those who expose the fallacies, deceits, pretenses, and cupidity that fuel support for that great geyser of cronyism, the U.S. Export-Import Bank.