Adam Smith's Simplified Wealth of Nations, Book 2, Chapter 5b: Trades

Chapter 5b: Trade

24 Wholesale trade is the buying and selling by wholesale.

It may be reduced to three kinds:

  1. The home-trade
    • This is the purchase of local produce in one part of a country to sell in another part of the same country.
    • It includes the inland and the coasting trade.
  2. The foreign trade of consumption
  3. The carrying trade
25 The home trade generally replaces two distinct capitals [that of the buyer and that of the seller] employed in agriculture or manufactures. 26 The capital employed in buying foreign goods for home-consumption in exchange for domestic produce, also replaces two distinct capitals. 27 But the returns of the foreign trade of consumption are very seldom as quick as those of the home-trade. 28 The foreign goods for home-consumption may sometimes be bought with other foreign goods.
NARA trade - New Page (1)
29 Whatever foreign goods are used to buy other foreign goods for home-consumption, brings no essential difference in:

For example, if foreign goods are bought in Britain with Brazilian gold, this gold, like the tobacco of Virginia must have been bought with:

As far as the nation's productive labour is concerned, the foreign trade done with gold and silver has all the advantages and inconveniences of any round-about foreign trade.

30 The capital of any country employed in the carrying trade is all withdrawn from supporting its productive labour to support the productive labour of foreign countries. 31 The capital employed in the home-trade will generally: The capital in the foreign trade of consumption has a greater advantage over an equal capital in the carrying trade. 32 When the produce of any country exceeds its own demand, the surplus must be sent abroad. 33 When the foreign goods purchased with the surplus domestic produce exceed the demand at home, the surplus must be sent abroad again. 34 When a country's capital stock is increased to the point that it cannot be all employed to support its productive labour, the surplus naturally disgorges itself into the carrying trade. 35 The extent of the home-trade and the capital employed in it, is limited by the value of the surplus produce of all the distant places within the country. 36 Private profit is the sole motive of the owner of the capital in agriculture, manufactures, or wholesale or retail trade.
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