Quotation of the Day…

by Don Boudreaux on November 24, 2022

in Adam Smith, Doux Commerce, Trade

… is from pages 227-228 of Samuel Gregg’s superb 2022 book, The Next American Economy: Nation, State, and Markets in an Uncertain World:

Part of [Adam] Smith’s critique of eighteenth-century mercantilism was that it exacerbated the potential for international conflict. Thanks to its beggar-thy-neighbor conception of wealth, mercantilism encouraged governments to think that national prosperity could only come at others’ expense. This mindset stimulated national rivalries, whether it concerned territory in Europe or colonies and trading rights in the Americas, Africa, and Asia. To the extent that free trade undermined many of these sources of conflict, Smith thought that it could encourage greater peace among nations.

DBx: And Smith was correct.

That the beggar-thy-neighbor view – that the zero-sum conception – of the international economy is still prevalent is made clear by the rantings, complaints, and interventionist proposals of Donald Trump and his ilk. But Trump and Trumpians aren’t alone. The very same misunderstanding of the nature of trade is held by non-Trumpian ‘national conservatives,’ as well as by most progressives. Indeed, this misunderstanding is the dominant view across the political and ideological spectra. The fact that non-Trumpians are usually a bit less bellicose than are Trumpians when they describe international trade as being a ‘competition’ of ‘our’ country versus some other country, or versus the rest of the world, doesn’t dilute the substance of their error – an error that’s both impoverishing and dangerous.

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