[algernonpj]

Cool, change the subject and ignore what Smith said:
“As every individual, therefore, endeavours as much as he can, both to employ his capital in the support of domestic industry, and so to direct that industry that its produce maybe of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain; and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention”

I love the smell of cow patties in the morning ;)

[arrogantsob]

Smith also believed that maximizing foreign trade could maximize national wealth. He was opposed to most of the rules established under mercantilism which restricted international trade because they also reduced the national wealth. The sentiment within the quote was never meant to imply that preference of domestic industry should lead to government control or prohibition of foreign trade. His whole book was based upon the idea of removing these controls.

It is a subjective idea in any case and nebulous as to its real impact. Where does such “preference” stop? I’ll pay 10% for X, or 20% or 200%? And for the very poor, in 1776 England there were lots, there really can be no such preference at all even 2% could be too much. So I am not really sure of the point of that quote.

[expat_panama]

post 297 by algernonpj

Smith said: “As every individual, therefore, endeavours as much as he can, both to employ his capital in the support of domestic industry, and so to direct that industry that its produce maybe of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain; and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention”

This is good, we all agree that tariffs are bad and cross-border trade is good because like Smith suggested we want to leave questions of industry support and security to the individual, not the government.  Elsewhere in "The Wealth of Nations" (pp. 264-265 in my copy) Smith said:

"It is the maxim of every prudent master of a family, never to attempt to make at home what it will cost him more to make than to buy.. . . If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry, employed in a way in which we have some advantage."