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.

• You must be present in class to receive full credit for this assignment. Assignments submitted before class without accompanying class attendance will receive no more than half credit. Assignments submitted after class on Wednesday, January 31 cannot receive any credit.
• This assignment is worth 15 points. Your score will be based both on effort and “correctness” of your answers. If you don’t understand the meaning of a particular paragraph or line, you should nonetheless give your best shot at answering the question (nonsensical answers will not be rewarded, however).
• Your answers must be typed. Only typed answers will receive credit. We will discuss answers to these questions in class on Wednesday, January 31, at which time you may wish to add hand-written notes for your own clarification.
• You may work with others in completing this assignment. That is, you may discuss the ideas contained in the readings. However, each person should write up answers to these questions on his or her own. You may consult the Heilbroner book for additional thoughts.

Paragraph numbers here refer to the excerpt from the original.

1. Paragraphs [1]-[3] 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 [4]  What are the owners of capital looking for when they choose how to employ that capital? What is the result?

3. Paragraphs [5]-[6] Where do the owners of capital endeavor to employ their capital? Why?

4. Paragraphs [7]-[9] 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 [11] What do tariffs and quotas create? Is this Good or Bad?

6. Paragraph [12] 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 [15] Could Scotland produce good wine? Why would it be A Good Idea to try?

8. Paragraph [16] Who benefits from restrictions on imported goods?

9. Paragraphs [25], [32] What are two good reasons for restricting imports?

10. Paragraphs [39]-[40] 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?