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Bob Lawson reminds us of the wisdom of Adam Smith

I strongly believe in reason and sound economic analysis and strongly object to economic and social policies being based on “emotions” and the sentiment of the day.

However, I must admit when it comes to discussions about trade and immigration I find it hard to not become somewhat emotional about the issues. I simply can’t take the protectionist and anti-immigrations stance that unfortunately are becoming increasingly popular both in the US and Europe these days.

I was therefore happy to see my friend professor Bob Lawson (Southern Methodist University) today post (on Facebook) a brilliant Adam Smith quote from Wealth of Nations:

“Nothing, however, can be more absurd than this whole doctrine of the balance of trade, upon which, not only these restraints, but almost all the other regulations of commerce are founded. When two places trade with one another, this doctrine supposes that, if the balance be even, neither of them either loses or gains; but if it leans in any degree to one side, that one of them loses and the other gains in proportion to its declension from the exact equilibrium. Both suppositions are false. A trade which is forced by means of bounties and monopolies may be and commonly is disadvantageous to the country in whose favour it is meant to be established, as I shall endeavour to show hereafter. But that trade which, without force or constraint, is naturally and regularly carried on between any two places is always advantageous, though not always equally so, to both.”

Update: Over at Bleeding Heart Libertarians Jason Brennan has a great post on The Moral Presumption in Favor of Free Trade. Those of us who believe in liberty and peace now more than ever need to make the moral and economic case for free trade and open borders.

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