Yes, #adasmSmith says sovereigns should also maintain public institutions and public works that are good for society but that people won’t pay for on their own. (V.i.c.1) #WealthOfTweets #SmithTweets
And yes, this category of expenses includes education, about which more later. We promise. (V.i.c.1) #WealthOfTweets #SmithTweets
The first kind of public works Smith is concerned with are the kind that facilitate commerce in general. Like ROADS. (V.i.d.1) #WealthOfTweets #SmithTweets
These projects should be funded through tolls rather than taxes. That way you pay to maintain what you use. That’s fair. (V.i.d.2–5) #WealthOfTweets #SmithTweets
Plus, if you charge a higher toll for fancy and heavy rich-people-carriages, their vanity is made into something useful to the poor. (V.i.d.2–5) #WealthOfTweets #SmithTweets
(Bonus fancy and heavy rich-people-carriage content for #JaneAusten fans.) jasnanorcal.org/inkwell/ink9
Paying for roads this way—based on use and traffic—means you only get roads, bridges, etc. where they are really useful for commerce. You can’t just throw them up willy nilly to enhance the scenery. (V.i.d.6) #SmithTweets
It’s even better if the maintenance of canals, along with the profits from the tolls, are in private hands. They canals will be better taken care of. (V.i.d.7) #WealthOfTweets #SmithTweets
But you can’t do that for roads. Canals become useless if neglected, but badly maintained roads are still passable and could still collect tolls.
This means the owners of roads could ignore their responsibility and still profit. That’s bad. (V.i.d.8) #WealthOfTweets #SmithTweets
How does Smith know this? Because it’s going on all over Great Britain. (Complaining about potholes is apparently not just a 21st century sport.) (V.i.d.9) cbc.ca/1.3158488
#WealthOfTweets #SmithTweets
Lots of people think tolls are so profitable they could make a huge contribution to the revenue of the country.
Smith doesn't think this sounds accurate or practical. (V.i.d.10) #WealthOfTweets #SmithTweets
First, this would inevitably increase the costs of tolls, and increase them quickly. That's just how government works. (V.i.d.12) #WealthOfTweets #SmithTweets
Secondly, that tax on carriages by weight? That’s fair if the taxes are going to repair the roads, but not fair if they’re going to spend the money in other ways. And it would raise cost of bulky goods as well.(V.i.d.13) #WealthOfTweets #SmithTweets
Last, how are you supposed to make sure that the government bothers to fix the roads with the toll money? They could charge high tolls, neglect the roads, and the people would have no recourse. (V.i.d.14) #WealthOfTweets #SmithTweets
And now...a brief survey of roads around the world:

There are lots.

They have potholes. cnn.com/2019/07/01/us/…
(V.i.d.16–17) #WealthOfTweets #SmithTweets
It’s better to have roads and other public works maintained at a local or provincial level rather than at a national level whenever possible. And that means tax money would be kept local as well. (V.i.d.18) #WealthOfTweets #SmithTweets
Again, Smith isn’t an idiot. He knows there's plenty of abuse and neglect of public works at the local level, but unlike national abuses they’re limited in their extent. (Edinburgh can't ruin the roads in Kirkcaldy.) (V.i.d.18) #WealthOfTweets #SmithTweets
Up until now we’ve been talking about public works that support commerce in general, but there are also public works that support particular kinds of commerce. (V.i.e.1) #WealthOfTweets #SmithTweets
Oh, hey, barbarous and uncivilized nations again.
#Sigh (V.i.e.2) threadreaderapp.com/thread/1346098…
#WealthOfTweets #SmithTweets
Trading with nations that are inclined to violence means the need for special protections. These can be paid for with taxes, a fine on traders who choose to trade there, or a duty on the goods they trade. (V.i.e.3) #WealthOfTweets #SmithTweets
You get companies like the East India Co. (spoiler: Smith's no fan) when merchants convince the state to let them take on the duty of the sovereign to oversee trade in a particular location. They start out useful, end up harmful. (V.i.e.4–5) #WealthOfTweets #SmithTweets
There are two kinds of these foreign trading companies: regulated and joint stock.
Neither is great, but Smith has a particular dislike for the joint stock company in foreign trade. (V.i.e.7–40) #WealthOfTweets #SmithTweets
Regulated companies are companies made up of people engaged in trading. They use apprenticeships, membership fees, and lobbying for burdensome regulation to keep competition to a minimum. (V.i.e.7) #WealthOfTweets #SmithTweets
They’re not great, but Smith saves his ire for the joint stock companies. Dorothy Parker would have said “Regulated companies are just plain terrible, but joint stock companies are fancy terrible. They’re terrible with raisins in it." (V.i.e.15–40) #WealthOfTweets #SmithTweets
Joint stock companies allow people to shrug off responsibility and make it too easy to admit new people who don’t know the business. Company directors are generally “adventurers” rather than experienced traders. (V.i.e.15–18) #WealthOfTweets #SmithTweets
And THIS is how you end up with things like the South Sea Company. (V.i.e.15–18) resobscura.blogspot.com/2011/03/playin…
#WealthOfTweets #SmithTweets
Anyone else having a hard time having sympathy for the decline and fall of the Royal African Company’s forays into the slave trade? Evil AND incompetent. Here’s a solid discussion of Smith on Slavery. (V.i.e.19–20) adamsmithworks.org/documents/adam… #SmithTweets
Basically, the history of this kind of trading company is a history of slavery, incompetence, greed, and irresponsibility.
Smith is NOT here for it, as demonstrated by his 6.5 page, single paragraph takedown of the East India Company. (V.i.e.26) #WealthOfTweets #SmithTweets
Companies like these produce “bad stewards and bad sovereigns” and offer people “either the pleasure of wasting or the profit of embezzling whatever surplus might remain” after the stock dividends are paid. (V.i.e.26–27) #WealthOfTweets #SmithTweets
It’s all the worse when the company is given the right to take over the forts and garrisons in the places where they trade. That means they end up with the right to make war, which they do “unjustly, capriciously, and cruelly.” (V.i.e.28) #WealthOfTweets #SmithTweets
It might make sense to give some advantage to merchants who open new lines of trade at their own risk and expense. But letting that advantage stay in place forever is a disaster. It supports negligence and corruption. (V.i.e.30) #WealthOfTweets #SmithTweets
[Can we just take a minute here? We, the SmithTweeters, have long been on record saying that people who love free markets should be the strongest critics of people who corrupt them and use them to oppress. This is why we are on TeamSmith.] #WealthOfTweets #SmithTweets
[It is, in fact, why we are tweeting #WealthOfNations, because we think it's incredibly important that people realize this kind of critique is part of Smith's economic arguments.] #WealthOfTweets #SmithTweets
Smith will allow that it’s possible to have a functioning and not-evil joint stock company for businesses like banking and insurance, as well as for a few engineering enterprises. That’s because the rules are so clear cut. (V.i.e.32–39) #WealthOfTweets #SmithTweets
But aside from those very few exceptions, joint stock companies are a disaster, and they fail at everything except causing harm. (V.i.e.40) #WealthOfTweets #SmithTweets
#TLDR: Joint stock companies? Smith hates ‘em. (V.i.e) #WealthOfTweets #SmithTweets

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More from @adamsmithworks

23 Feb
Ah, #AdamSmith on education. Something to aggravate every. single. reader. Let’s go! (V.i.f) #WealthOfTweets #SmithTweets
Providing educational institutions is part of the duty of the sovereign, but those institutions can be made to produce some of the money needed to maintain them. We naturally do that already, because we pay teachers and endow colleges. (V.i.f.1–2)#WealthOfTweets #SmithTweets
BUT Smith isn’t a fan of endowing schools.
Or at least, he has a lot of questions about how much the endowments have improved the education students get. (V.i.f.3)#WealthOfTweets #SmithTweets
Read 32 tweets
21 Feb
Yesterday #AdamSmith outlined the first duty of the sovereign—protecting the nation from attack. The second duty of the sovereign is protecting individuals from each other aka administering justice. (V.i.b.1) #WealthOfTweets #SmithTweets
Just as defense gets more complicated and expensive as societies develop, so does the process of administering justice. (V.i.b.1) #WealthOfTweets #SmithTweets
In nations of hunters, where there is little private property, there’s little need for complex justice. We may do violence to each other out of anger or other passions, but we really don’t give in to that very often. (V.i.b.2) #WealthOfTweets #SmithTweets
Read 34 tweets
20 Feb
Today we start the last book of #AdamSmith's #WealthOfNations.


#WealthOfTweets #SmithTweets
Book Five of #WealthOfNations is all about the duties of the sovereign and how to pay for them. In this first part of chapter 1, we’re talking about the cost of defense. (V.i.a) #WealthOfTweets #SmithTweets
The sovereign's duty to protect the country can only be done through military force, but how you get the money to pay for that military varies according to time, place, and circumstance. (V.i.a.1) #WealthOfTweets #SmithTweets
Read 27 tweets
19 Feb
Remember how #AdamSmith was going to explain the Mercantile and Agricultural systems? After 230 pages on the Mercantile system it’s finally time for the Agricultural! ...which gets 25 pages. (IV.ix) #WealthOfTweets #SmithTweets
He’s got a pretty good reason for keeping this brief: A national political economy based entirely on agriculture has never existed except in the minds of French philosophers. Why spend a lot of time on it? (IV.ix.1–2) #WealthOfTweets #SmithTweets
The French philosophers were 😍 with the idea of a purely agricultural system because of the favoritism shown to a purely mercantile system under Louis XIV and his minister Colbert. But both systems were out of balance.(IV.ix.3–4) #WealthOfTweets #SmithTweets
Read 38 tweets
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
17 Feb
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
Read 28 tweets

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