Quote by Adam Smith, Wealth of Nations, B
Though the encouragement of exportation and the discouragement of importation are the two great engines by which the mercantile system proposes to enrich every country, yet with regard to some particular commodities it seems to follow an opposite plan: to discourage exportation and to encourage importation. Its ultimate object, however, it pretends, is always the same, to enrich the country by the advantageous balance of trade. It discourages the exportation of the materials of manufacture, and of the instruments of trade, in order to give our own workmen an advantage, and to enable them to undersell those of other nations in all foreign markets; and by restraining, in this manner, the exportation of a few commodities of no great price, it proposes to occasion a much greater and more valuable exportation of others. It encourages the importation of the materials of manufacture in order that our own people may be enabled to work them up more cheaply, and thereby prevent a greater and more valuable importation of the manufactured commodities.
Summary
This quote explains the contradictory nature of the mercantile system's approach to trade. It states that while the system aims to enrich a country through exporting and discouraging imports, it also implements policies that discourage exportation of certain goods and encourage the importation of materials for manufacturing. The reason behind this seeming paradox is to give domestic workers an advantage by allowing them to undersell foreign competitors. By restricting the exportation of cheaper goods, it hopes to promote the exportation of more valuable ones. Likewise, it encourages the importation of materials to enable domestic manufacturing and prevent greater imports of finished goods.
Topics
Trade (import / Export)
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