Adam Smith Tariffs Quotes

Thanks to economists, all of us, from the days of Adam Smith and before right down to the present, tariffs are perhaps one tenth of one percent lower than they otherwise would have been. … And because of our efforts, we have earned our salaries ten-thousand fold.

It should come as no surprise, then, that we have a tendency to take our free-market system as a given, to assume that it flows naturally from the laws of supply and demand and Adam Smith’s invisible hand. And from this assumption, it’s not much of a leap to assume that any government intrusion into the magical workings of the market—whether through taxation, regulation, lawsuits, tariffs, labor protections, or spending on entitlements—necessarily undermines private enterprise and inhibits economic growth. The bankruptcy of communism and socialism as alternative means of economic organization has only reinforced this assumption. In our standard economics textbooks and in our modern political debates, laissez-faire is the default rule; anyone who would challenge it swims against the prevailing tide.

Because the United States was new, it did not have long-established monopolies and systems of privilege to be dismantled. It had no immensely wealthy British East India Company or entrenched aristocracy that dominated the country’s politics. It had no ancient royal grants, such as the rights to collect local tariffs that abounded in prerevolutionary France. Thus it was much easier for the United States to inculcate the ideas of Adam Smith into its economic system and politics than it was for the other major Western nations. This gave it immense advantages in the new economic world that was being born as the Founding Fathers met in Philadelphia.