Thread by @adamsmithworks

Sorry to leave you hanging there yesterday, Smithsters. There's just a lot going on in this chapter!
So we return to #AdamSmith's many grievances with the very idea of the mercantile system. (IV.i.14–45) #WealthOfTweets #SmithTweets

People worry too much about the supply of cash money. It’s easy to import more and you can always use barter instead, if things get really tight. Also, paper money is a thing! (IV.i.14–15) #WealthOfTweets #SmithTweets

But everyone complains about a scarcity of money. That’s usually because they can’t get credit, or are big spenders. Or it can be caused by overtrading. It’s not about how many coins are around, but the ease of getting them. (IV.i.16) #WealthOfTweets #SmithTweets

Okay, now, wait just a minute. “It would be too ridiculous to go about seriously to prove” that wealth is about purchasing power, not about physical money. WHAT DID WE TWEET BOOK 2, CH. 2 FOR, THEN? (IV.i.17) #Ahem #WealthOfTweets #SmithTweet

It’s easier to buy money with goods than goods with money, but that’s because money is more flexible, not because it’s “more wealth.”
BUT! goods can be used for things other than buying money. And money can only be used for buying goods. (IV.i.18) #WealthOfTweets #SmithTweets

We act like it’s bad to trade durable money for perishable goods. But we never worry about trading non perishables (like pots and pans) for perishables (like wine). It would be silly. We’d end up with too many pots and pans and no wine. (IV.i.19) #WealthOfTweets #SmithTweets

[Please take a moment to appreciate the 210 word sentence in paragraph 19. This is why it was necessary to hire a crack team of professional SmithTweeters rather than allow #AdamSmith to tweet this himself.] (IV.i.19) #WealthOfTweets #SmithTweets

We also act like we have to accumulate gold and silver to pay for wars. This is only sort of true. Militaries need tons of consumables, too. (IV.i.20–21) #WealthOfTweets #SmithTweets

Time for another subdivision: A nation’s accumulated gold and silver can be divided into

1) circulating money
2) "plate" owned by private families

You can’t pay for war with circulating money. Melting down plate doesn’t pay the bills, makes enemies, and means everything's less pretty.
Countries once paid for wars from the royal treasury.
But now, they can do it by exporting goods! (IV.i.23–27) #WealthOfTweets #SmithTweets

Commercial countries exchange gold and silver bullion. We should think of bullion as the money of the "mercantile republic" (the money of international trade), or just an international version of national currencies. (IV.i.28) #WealthOfTweets #SmithTweets

More valuable manufactured goods, which (like gold and silver) transport a lot of value in a little space, can take the place of gold and silver when paying for wars. (IV.i.29) #WealthOfTweets #SmithTweets

If valuable manufactured goods get used to pay for war, eventually the structure of the economy will shift to help support paying for war.

That's bad.

It can create a commercial interest in carrying on wars. (IV.i.29) #WealthOfTweets #SmithTweets

Also: You can’t win wars with vegetables. (IV.i.30)

#MilitaryStrategyWithAdamSmith #WealthOfTweets #SmithTweets

Back to foreign trade: It's also useful because you export stuff you have but don’t want in exchange for stuff you want but don’t have.
It's JUST like the butcher, brewer, and baker from way back in Book 1. But with international borders. (IV.i.31) #WealthOfTweets #SmithTweets

Smith will say it as many times as it takes: The discovery of America didn’t create wealth with gold and silver mines.

It goes: Hey look, America!➡expanded markets➡increased division of labor➡improvements in manufacture➡wealth!(IV.i.32) #WealthOfTweets #SmithTweets

I mean, it’s a good thing that Smith explained that he’s not going to bother arguing that gold and silver aren’t wealth. Otherwise, we might think that’s what he’s doing. (IV.i.32) #WealthOfTweets #SmithTweets

America was a new market for European goods. First contact with Americans could have been hugely beneficial. But the "savage injustice of the Europeans" made it "ruinous and destructive" instead. That's a use of "savage" we can get behind. (IV.i.32) #WealthOfTweets #SmithTweets

(But we are STILL side eyeing the use of “savages and barbarians” in paragraph 33, Dr. Smith.) (IV.i.33)
threadreaderapp.com/thread/1346098…
#WealthOfTweets #SmithTweets

Trade with America still generates a lot of wealth! But not👏from👏gold👏. It's because fewer trade restrictions gives the colonies access to a large market! (IV.i.33) #WealthOfTweets #SmithTweets

The East India Company?
Smith hates it. (IV.i.33) #WealthOfTweets #SmithTweets

WAIT A MINUTE! First Smith explains money isn’t wealth (II.ii). Then says it would be dumb to explain it (IV.i.17). Then he explains it. Tediously. (IV.i.33) Now he tells us why he explained it, and explains it again?

We. Need. Tea. (IV.i.34) #WealthOfTweets #SmithTweets

We get why he’s irritated, though. When people don't get it, they make national policy based on keeping money in the country. That doesn’t work. It makes us worse off. It's bad. And he's about to explain all that next chapter. (IV.i.35–45) #WealthOfTweets #SmithTweets

(Unless, you know, Smith decides it would be silly to explain it. In which case he’ll explain it three times, while saying that he isn’t going to. We, the Smithtweeters, cannot wait to see what happens! See you tomorrow!) (IV.i.) #WealthOfTweets #SmithTweets