Literature Study GuidesThe Wealth Of NationsVolume 2 Book 4 Chapter 8 Summary

The Wealth of Nations | Study Guide

Adam Smith

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The Wealth of Nations | Volume 2, Book 4, Chapter 8 : Conclusion of the Mercantile System | Summary

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Summary

Here, Smith reviews his major objections against the mercantile system, as laid out more extensively in the previous seven chapters. He reiterates the tendency of mercantile policies to help the rich and hurt the poor, and to artificially redirect trade away from the domestic market. He even lays out a few more examples of mercantilist policies that demonstrably hurt both consumers and producers—especially egregious is the law forbidding tradesmen from traveling abroad and teaching their craft in other countries. Smith concludes that the whole mercantile system has, true to its name, been established by merchants for their own profit and not for the benefit of the public or the nation.

Analysis

Despite its definitive-sounding title, this chapter is not Smith's final word on the mercantile system. In Book 5, which is devoted to taxation and public works, Smith will suggest that the British government is wasting funds on such expensive mercantilist ventures as the development of the American colonies (already a lost cause in 1776), and the support of the East India Company (which survived until the mid-Victorian age). Still, at this point in the text, Smith has set forth his main objections to the mercantilist position and developed them in considerable detail. In addition to recapping those objections, this chapter offers a few final horror stories about the violent means by which mercantilists have sought to defend their interests—cutting the hands off unlicensed livestock exporters, for example. "Like the laws of Draco," Smith says in an allusion to the famously harsh Athenian legislator, "these laws may be said to be all written in blood."

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