Reading Analysis 2
Adam Smith, TheWealth of Nations
BOOK FOUR, CHAPTER II
Of Restraints upon the Importation from Foreign Countries
of such Goods as can be produced at Home
General Directions: Answer each of the questions below, based on your reading of the relevant paragraphs from this chapter. Answers are due at the beginning of class on Wednesday, January 31.
Paragraph numbers here refer to the excerpt from the original.
1. Paragraphs - Who in Great Britain benefits from high duties (tariffs) or absolute prohibition (quotas) on imports? Do such tariffs and quotas increase total production (“the general industry of the society”) in Great Britain? Why or why not? (What does “the general industry of society” depend on?) What effects do tariffs and quotas (“the regulation of commerce”) have on production (“the quantity of industry”)?
2. Paragrpah  What are the owners of capital looking for when they choose how to employ that capital? What is the result?
3. Paragraphs - Where do the owners of capital endeavor to employ their capital? Why?
4. Paragraphs - What are the owners of capital looking for when they choose how to employ that capital? What is the result? (again) What role does the “invisible hand” play?
5. Paragraph  What do tariffs and quotas create? Is this Good or Bad?
6. Paragraph  Famous passage alert: Smith says “What is prudence in the conduct of every private family can scarce be folly in that of a great kingdom.” What does that mean? “If a foreign country can supply us with a commodity cheaper than we ourselves can make it,” what should we do? Why?
7. Paragraph  Could Scotland produce good wine? Why would it be A Good Idea to try?
8. Paragraph  Who benefits from restrictions on imported goods?
9. Paragraphs ,  What are two good reasons for restricting imports?
10. Paragraphs - Smith describes a third case, in which we might or might not want to set restrictions on imports. What is this case? What determines whether this third reason for restricting imports is A Good Idea or not?