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Free trade brings to smaller nations all the advantages of empire without the disadvantages.
Adam Smith acknowledged that one advantage of empire was that goods and people could be readily moved internally, wherever they were needed. But he noted that you can get all that by each nation voluntarily adopting a policy of free trade.
Economist Adam Smith warned that when Western commercial interests get involved in policy-making abroad, war and want are sure to follow.
In 1757, a Government-backed trade agency called the British East India Company achieved such commercial and military superiority in India that its board members appointed princes, conquered territories, and dictated social and economic policy. Twenty controversial years later, Scottish economist Adam Smith warned that a company set up to make profits for European clients should not and could not run India for the Indians.
Adam Smith contrasted the Government’s handling of the national economy with the way most families handled theirs.
By 1776, the long-standing policy of favouring British producers and blocking overseas competitors had raised prices, cost jobs, and only last year driven the American colonies to revolution. Adam Smith thought it both damaging and insulting, for the humblest tailor or cobbler could have told the Government that this was no way to run a budget.
Economist Adam Smith so changed the conversation in Britain that most people take his groundbreaking insights for granted.
Adam Smith’s free market ‘Wealth of Nations’ had an immediate and highly beneficial impact on British economic policy, one whose ripples spread across the world. Yet as biographer Richard Haldane explains, so successful was Smith in changing the conversation that most people have now forgotten all about him.
Adam Smith could not imagine it would ever happen, but he nevertheless recommended that Britain grant independence to her colonies.
Scottish economist Adam Smith regarded the British Empire as the best of its kind in history, but he still believed that it would be better for everyone if London abandoned her single market and meddlesome governance, and granted her colonies independence.
Adam Smith argued that the Bengal Famine of 1769 would have been much less of a tragedy under a free trade policy.
The Bengal Famine of 1769 was a humanitarian catastrophe and an ugly blot on Britain’s colonial record. Scottish economist Adam Smith, a severe critic of colonial greed and the East India Company, believed that it would have been no more than a manageable food-shortage had the Company pursued a policy of free trade.
The spread of Western civilisation must not be credited to European policy, but to a culture of curiosity, enterprise and defiance.
Adam Smith, writing in 1776, the year that her American colonies declared independence from Great Britain, reminded his readers that the Americans had no obligations towards London. The thirteen colonies had been founded by Englishmen, but not by England. No European colony abroad had come into being through Government policy.