Send us a text Tracing out Adam Smith’s Book IV, chapters 1–6, to show how mercantilism mistakes money for wealth, how protection creates monopolies at home, and why free exchange raises real prosperity. Smith defends two narrow exceptions—defense and tax parity—while rejecting bounties and politicized treaties that entangle trade with war. • mercantile vs physiocratic systems and their influence • wealth as goods and industry, not specie • balance of trade as a “pestilent error” • make-or-buy logic and misallocation from tariffs • invisible hand clarified and limited • natural vs acquired advantages in specialization • two exceptions: national defense and tax parity on imports • drawbacks as refunds vs bounties as subsidies • corn bounties, higher home prices, cheaper foreign prices • specie hoards as dams that inevitably overflow • treaties of commerce, Methuen example, political risk • case for unilateral free trade over reciprocity Mentioned in the podcast: Laura Williams on Pineapples Pineapples in Sweden Oren Cass on Adam Smith Dan Klein's Law and Liberty piece on Oren Cass on Adam Smith If you have questions or comments, or want to suggest a future topic, email the show at
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