Adam Smith's Simplified Wealth of Nations, Book 4, Chapter 7f, Part 3: Advantages Europe got from the discovery of America and the Cape of Good Hope

Chapter 7f: Part 3: The Advantages Europe Derived From The Discovery of America And The Cape Of Good Hope

87Such were the advantages the American colonies derived from the policy of Europe.

88What are the advantages Europe derived from the discovery and colonization of America?

89Those advantages are:

  1. The general advantages which Europe, as one great country, derived from those great events
  2. The particular advantages which each colonizing country derived from its colonies
90 The general advantages which Europe derived are:
  1. The increase of its enjoyments
  2. The increase of its industry
91 The surplus American produce imported into Europe furnishes Europeans with commodities they could not otherwise have possessed. 92 The discovery and colonization of America contributed to increase the industry of the following:
  1. All the countries which trade to it directly, such as:
    1. Spain
    2. Portugal
    3. France
    4. England
  2. All those which trade to it indirectly such as:
    1. Austrian Flanders
    2. Germany
      • These send their goods. such as linen, through Spain, Portugal, France, and England.
All such countries have gained a more extensive market for their surplus produce and have been encouraged to increase its quantity. 93 It is not so evident that those great events contributed to encourage the industry of countries which may never have sent their own produce to America, such as: Some American produce is consumed in Hungary and Poland. 94 Those great events may even have increased the enjoyments and increased the industry of countries which never directly traded with America. 95 The exclusive trade of the mother countries reduces or unnaturally keeps down the enjoyments and industry of:

It is a dead weight of one of the great springs which mobilizes a great part of the business of mankind.

  • By rendering the produce of all other countries dearer in the colonies:
  • For the supposed benefit of some countries, it clogs the pleasures and encumbers the industry of other countries and more of the colonies.
  • The difference is very great between being excluded from a market when all others are open and being confined to a market when all others are shut.
  • The surplus produce of the colonies is the original source of all the increased enjoyments and industry Europe derives from the discovery and colonization of America. 96 Each colonizing country derives two advantages from its colonies:
    1. Those common advantages which every empire derives from its provinces.
    2. Those peculiar advantages from peculiar provinces as the European colonies of America.
    97 The common advantages which every empire derives from its provinces consist in:
    1. The military force which they furnish to defend it
    2. The revenue which they furnish to support its civil government
    98 The European colonies of America never furnished any military force for the defence of the mother country. 99 The colonies of Spain and Portugal only contributed revenue towards the defence of the mother country or the support of her civil government. 100 The advantages of such colonies to their mother countries consist in peculiar advantages resulting from the provinces of so very peculiar a nature as the European colonies of America. 101 Because of this exclusive trade, all the surplus enumerated commodities of the English colonies can be sent only to England.

    Absolute Vs Relative Advantage

    102 This advantage is relative, not absolute. 103 For example, England enjoys a monopoly of Maryland and Virginia tobacco, which it exports some to France. 104 England probably:
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    Next: Chapter 7g: The Act of Navigation