It's been a whole day since we tweeted Part 2 of this chapter, so let us remind you: #AdamSmith just said that the colonies got nothing that helped them succeed from the mother country. (IV.vii.c) #WealthOfTweets #SmithTweets
So these two opening sentences are pretty heckin’ sarcastic:
Now we've seen the great advantages the colonies got (they got nothing!) (IV.vii.c.1)
So what have been the great advantages to Europe! (IV.vii.c.2)

Seems like there’s a...tone there. #WealthOfTweets #SmithTweets
Europeans buy goods from America, and Americans buy European goods as well. Even countries that don’t trade directly with America have benefited. (IV.vii.c.3–8) #WealthOfTweets #SmithTweets
The mother countries restrict colonial trade (esp the exclusive right to buy from or sell to their colonies). That's a dead weight on the increase of the wealth of nations. Everything is more expensive, everyone enjoys less of it. (IV.vii.c.9) #WealthOfTweets #SmithTweets
Maybe European countries get added security? In ancient times, empires expected military support and revenue from their colonies, and they got it.
18thC colonies? Not so much. (IV.vii.c.11–13) #WealthOfTweets #SmithTweets
Only Spain and Portugal were able to tax their colonies heavily enough to make a profit. For everyone else, colonies were an expensive luxury. (IV.vii.c.13) #WealthOfTweets #SmithTweets
Monopolies that mother countries gave themselves over (some enumerated) colonial goods are really the only "advantage" of colonies.
And it's only a relative advantage—enumerating the goods makes others poor, it doesn't make you rich. (IV.vii.c.15–18) #WealthOfTweets #SmithTweets
And #Monopolies? Not sure if you know this but... Smith hates ‘em.

Here's the #TLDR for the next 45 pages, Smithsters: colonial monopolies aren't special. They suck, too. (IV.vii.c) #WealthOfTweets #SmithTweets
No one:
Absolutely no one:
#AdamSmith: Let me tell you the disadvantages of monopoly trade with one’s colonies!
#BuckleUpButtercup…(IV.vii.c) #WealthOfTweets #SmithTweets
1. Trade with the colonies requires so many resources that other trades are decaying. (IV.vii.c.20–23)
2. Rates of profit on English trade are all out of whack and that messes with many things. (IV.vii.c.24–28)
3. The colony trade means we trade in a round-about rather than a direct fashion. With Smith's theory of capital, that's expensive and inefficient. (IV.vii.c.36)
4. The colony trade pulls us away from trading with neighboring countries. Also expensive/inefficient. (IV.vii.c.37)
5. Colonies are always understocked/in debt. (IV.vii.c.38)
6. Commodities that can only be sold to Great Britain oversupply Great Britain, which then has to be re-export them. (Smith finds this painfully dumb.) (IV.vii.c.40)
7. Resources that should be used to import good stuff to Britain get used to re-export stuff they require colonies to sell them, but can’t use. (IV.vii.c.41–42)
8. British trade is overdependent on colonial trade. That single focus is dangerous.( IV.vii.c.43)
A lot of these downsides stem from Smith's theory of capital which is...not how we think about capital today.

Frankly, it's amazing that we still think that so much of what he said here is right. Just not for the reasons he thought. (IV.vii.c.20–43) #WealthOfTweets #SmithTweets
We, the SmithTweeters, are very into early modern medicine (who isn't?), so let's geek out at Smith’s blood circulation metaphor.
The circulation of blood keeps a body healthy.
The circulation of trade keeps a nation healthy. (IV.vii.c.43) #WealthOfTweets #SmithTweets
So to save Great Britain from the equivalent of a national aneurysm, these restrictions on colony trade should be reduced. Free Trade! The statins of….okay, we’re stopping. (IV.vii.c.44) #WealthOfTweets #SmithTweets
The dangers of overdependence weren't theoretical. In 1774, 12 American colonies boycotted all British trade. The effects weren’t immediately awful, but Smith predicted gradual distress. (IV.vii.c.45) #WealthOfTweets #SmithTweets…
The monopoly on colony trade also interfered with liberty and justice, not just wealth.
Mercantile regulations were dangerous and hard to fix without more regulations. Which are also dangerous. (IV.vii.c.44) #WealthOfTweets #SmithTweets
Colony trade is “always and necessarily beneficial”.
𝙈𝙤𝙣𝙤𝙥𝙤𝙡𝙮 colony trade is “always and necessarily hurtful.” (IV.vii.c.46–51) #WealthOfTweets #SmithTweets
Colony trade is SO beneficial, in fact, that mother countries benefit from their colonies in spite of their rigid restrictions.
But it is 𝗗𝗘𝗦𝗣𝗜𝗧𝗘, not because of trade restrictions. (IV.vii.c.52–55) #WealthOfTweets #SmithTweets
Smith will never, ever stop listing reasons that monopoly colony trade is bad.
But here’s the big one:

It is wrong to promote the interests of one small group in one country by hurting the interests of everyone else in the world. (IV.vii.c.60) #WealthOfTweets #SmithTweets
“To found a great empire for the sole purpose of raising up a people of customers may...appear a project fit only for a nation of shopkeepers. It is, however, a project...for a nation whose government is influenced by shopkeepers. (IV.vii.c.63) #WealthOfTweets #SmithTweets
Dominion over colonies (as opposed to trade with them) gets Great Britain nothing. It only costs them... (IV.vii.c.66–80) #WealthOfTweets #SmithTweets
...but suggesting Britain voluntarily give the colonies up would offend national pride and private interests.

Smith wouldn’t dream of suggesting such a thing. (He’s suggesting it.) (IV.vii.c.66–80) #WealthOfTweets #SmithTweets
OK, fine, Dr. Smith. ONE MORE TIME: Monopolies derange the natural distribution of stock, and that’s always bad. (IV.vii.c.88–97) #WealthOfTweets #SmithTweets

Smith's language about the African colonies and East Indies grates, but he clearly deplores the depredation of colonies. (IV.vii.c.100–102) #WealthOfTweets #SmithTweets
The East India company is particularly bad. As bad as sovereigns are at being merchants, merchants are just as bad at being sovereigns. (IV.vii.c.103–106) #WealthOfTweets #SmithTweets
So yeah, like we said...
SmithTweeters out!

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More from @adamsmithworks

18 Feb
We made it, everyone! It's the conclusion of the discussion of the mercantile system! (IV.viii.) #WealthOfTweets #SmithTweets
The mercantile system tries to maintain the “balance of trade” by encouraging exports and discouraging imports. Counterintuively, sometimes that's done by encouraging imports. (IV.viii.1) #WealthOfTweets #SmithTweets
Manufacturers demand that their inputs be imported without duties or with bounties. Smith thinks that's a great start, but they should eliminate all duty on manufacturing imports, not just the ones demanded by the manufacturers. (IV.viii.2–3) #WealthOfTweets #SmithTweets
Read 26 tweets
16 Feb
In yesterday’s discussion of colonies, #AdamSmith was really good on a lot of issues—particularly on condemning murdering Indigenous people, despoiling colonies in search of gold that ain't there, and then pretending you're doing it all for God. #WealthOfTweets #SmithTweets
Today, Smithketeers, will not be such a feel-good day. You will not be heartened. You might want to pour a cup of tea. Or something much stronger. #WealthOfTweets #SmithTweets
Smith starts by noting that the colonies of developed nations where the “natives easily give place to the new settlers” get rich and cultured faster than anywhere else.

That phrase “give place to” cloaks a lot of horrors. (IV.vii.b.1) #WealthOfTweets #SmithTweets
Read 33 tweets
15 Feb
OK. Chapter 7 of Book 4 of #WealthOfNations is tough going. It's long. It's serious. It's all about colonies.

We can take comfort, though, in knowing that the chapter #AdamSmith says is about colonies is, in fact, about colonies. (IV.vii) #WealthOfTweets #SmithTweets
Colonies were a vexed subject when #AdamSmith was writing, and they’re even more complicated now. So, before we even get to the tweeting, here’s a link to that thread on Smith and “savage nations.” (IV.vii) #WealthOfTweets #SmithTweets

The reason for the ancient Greeks and Romans to settle colonies was straightforward: they didn’t have enough space for their growing populations. Their colonies were treated as “emancipated children”—connected but independent. (IV.vii.a.2) #WealthOfTweets #SmithTweets
Read 21 tweets
14 Feb
Dear Smithketeers. Over many chapters of #WealthOfNations, we've grown close. We were even going to ask all of you to be our Valentines.
And we have to tell you:

The title of Book IV Chapter 6, "Of Treaties of Commerce", is a lie. (IV .vi) #WealthOfTweets #SmithTweets
More like, "Of the reasons the Author is opposed to Treaties generally and the Treaty with Portugal in particular." (IV .vi) #WealthOfTweets
But FINE. Here we go:

Countries that bind themselves via a treaty to offer special treatment to the merchants and manufacturers of another country are granting them a sort of monopoly over their market. (IV. vi.1) #WealthOfTweets #SmithTweets
Read 22 tweets
13 Feb
#AdamSmith, #WealthOfNations, and #CornLaws!
What more could you possibly want on a Saturday morning? (IV.v.b) #WealthOfTweets #SmithTweets
Yes, it’s the Digression Concerning the Corn Trade and Corn Laws! We can barely contain ourselves long enough to remind you that “corn” doesn’t mean 🌽 It means the principal cereal crop of a nation. (We keep saying so because we keep forgetting.) #WealthOfTweets #SmithTweets
#TLDR on #AdamSmith’s thoughts on the Corn Laws:

They’re bad. (IV.v.b.1) #WealthOfTweets #SmithTweets
Read 29 tweets
12 Feb
We're back with more thoughts of #AdamSmith about the tools of mercantilism. Today: Bounties! (IV.v.) #WealthOfTweets #SmithTweets
Today we'd call bounties subsidies, which makes it much harder to use a Boba Fett gif.

So we're sticking with bounties. (IV.v.a.1) #WealthOfTweets #SmithTweets
Everyone admits, says Smith, that bounties shouldn't be given to industries or endeavors that could happen without them. But that means you're only going to give them to endeavors that can't pay for themselves. (IV.v.a.2) #WealthOfTweets #SmithTweets
Read 20 tweets

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