Of the Extraordinary Restraints Upon the Importation of Goods of Almost All Kinds, from those Countries with which the Balance is supposed to be Disadvantageous
- So what happens if you open your country to free trade and your country starts importing more than it exports? Won't that eventually make your country poor because it's spending more than it's making? Adam Smith doesn't think so.
- For example, it doesn't make sense to import wine from Germany and Spain instead of France just because you already import too much other stuff from France. Besides, you can always import the stuff and re-export it to other countries at a profit.
- The next concern is that English people would become drunker if they started importing really cheap French wine. But Smith is convinced that the cheapness of liquor won't make it any more desirable.
- He points to the fact that the biggest drinkers in England are poor people who can barely afford the stuff. Wealthy people (who can afford liquor easily) barely touch the stuff. So having the money to buy more booze doesn't mean people will do that.
- When you think about the wealth of a country, you don't just need to think about the money it has coming in (from exports) and the money it has going out (from imports). You have to think about the value of what it produces compared to the value of what it consumes. If it consumes more than it purchases, then it will probably get poorer over time.