Quotation of the Day…

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… is from page 39 of Razeen Sally’s excellent 1998 book, Classical Liberalism and International Economic Order [footnote deleted]:

[Adam] Smith does give detailed consideration to two major deviations from free trade: the support of infant industries and preferential trading arrangements (in his day, with the colonies). He rejects both policy preferences, for the promotion of infant industries or preferential trading arrangements diverts capital from other productive uses. Moreover, he is of the general opinion that the market is better at allocating capital to productive uses than having capital allocated in an arbitrary and discriminatory manner by government, favouring a few industries but damaging the rest of the economy.