It is unnecessary to occupy space in refuting this (to us absurd)
idea, as no refutation can be more satisfactory than Adam Smith's
own.
If I profit on the transaction of buying 1000 quarters of wheat for
gold, I do so irrespectively of all other exchanges by others.
Whether the firm next door to me has succeeded in selling to a Boston
house L2000 worth of Sheffield cutlery or no is a matter entirely
beside my bargain. My profit will depend practically on the movements
in the English corn trade: a small rise in the price of wheat at Mark
Lane between the date of my purchasing by cable the wheat in America
and my selling it at Mark Lane, may give me a large profit, or _vice
versa_. But my exchange of gold for the wheat is a separate
transaction of itself: it stands entirely on its own bottom.
It is perfectly true that if my neighbour in Threadneedle Street does
succeed in selling L2000 worth of cutlery to the New Englander, there
is another distinct national profit to England and to America.
[Footnote: I am assuming for simplicity throughout that every
exchange made by private merchants in this foreign trade is a
successful speculation; if in any particular speculation a merchant
loses, his country loses the same amount. As foreign trade, on the
whole, is an enormous national profit, I am justified in sinking the
particular cases of loss.
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