In a new piece written for Public Discourse, Research Director for Acton Institute, Samuel Gregg, revisited crucial points made by Adam Smith in his classic Inquiry into the Nature and Causes of the Wealth of Nations which argued for an embrace of international trade. Unfortunately, many of Smith’s ideas have today been cast aside for a stronger cry of economic nationalism. Gregg combats some misconceptions of free, global trade by revealing the dangerous results which would occur if nations chose to only implement ‘neo-mercantilism’ in the name of national interest.
Gregg organizes Smith’s insights into three categories, first addressing how Smith proved that a country’s economy “flowed from the development and extension of the division of labor within and between nations…the wider and deeper the size of the market, the greater the division of labor and the subsequent gains in productivity and growth.” Smith’s understanding of the benefits of international trade has been undermined however by ideas encroaching on rights to property and on labor. In the wake of growing restrictions, “a retreat from free trade would not only worsen this situation. It would also raise the price of a good number of foreign-made products and services, thereby putting many such goods beyond the reach of lower-income Americans.” (more…)