Adam Smith's Simplified Wealth of Nations, Book 4, Chapter 5f, Digression: The Carrying trade of wheat

Chapter 5f, Digression: The Carrying trade of wheat

73 In years of scarcity, the distress caused by the strict execution of those laws was probably very great. 74 These restraints on importation came before the bounty's establishment.

The Wheat Exporter

  1. 75 The wheat exporter only indirectly contributes to the home market's supply.
76 The 12th of Charles II. c. 4, allowed wheat exportation whenever wheat prices did not exceed 480 pence the quarter relative to other grains. 77 In this way, the exporter's trade was encouraged by a bounty.

Smith's Free Trade System

78 Were all nations to follow free exportation and importation, they would resemble the provinces of a great empire.

79 The laws concerning wheat may be compared to the laws concerning religion.

The Carrying Trade of wheat

  1. 80 The merchant carrier imports foreign wheat and re-exports it.

81 The carrying trade was banned in Great Britain on all ordinary occasions by high wheat import duties, without a drawback.

The Real Cause of Britain's Wealth

82 That system of laws connected with the bounty deserves no praise. 83 Great Britain's greatest prosperity was posterior to the laws connected with the bounty.

84 The laws connected with the bounty has exactly the same tendency as the police of Spain and Portugal.
  1. The following policies must more forcibly reduce the value of those metals in Spain and Portugal than the wheat laws can do in Great Britain:
    1. The tax in Spain
    2. The ban in Portugal of exporting gold and silver
    3. The vigilant police which executes those laws
  2. This bad policy is not counter-balanced by the liberty and security of the people in Spain and Portugal.
    • Industry is neither free nor secure there.
    • Their absurd and foolish civil and ecclesiastical governments would alone be sufficient to perpetuate their present state of poverty, even though their commercial regulations were wise.

85 The 13th of George III, c. 43, established a new system regarding the wheat laws, better than the ancient one.
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