Thus far this week (see here, here, and here), we have surveyed Book IV, Chapter 1 of Adam Smith’s Wealth of Nations. Next up, then, is Chapter 2, which is titled “Of Restraints upon the Importation from Foreign Countries of such Goods as can be produced at Home.” This is the first of five chapters where Smith forcefully — and to any intellectually-honest person, i.e. to any non-politician, persuasively — denounces various forms of protectionist trade policies. It is also the pivotal chapter where Smith’s famous “invisible hand” (IV.ii.9) makes its one and only appearance in Smith’s entire magnum opus. As it happens, I wrote up a detailed paragraph-by-paragraph review of Book IV, Chapter 2 last year after our rabble-rousing demagogic president announced a first round of tariffs on Canada, Mexico, and China on February 1, 2025. In fact, I wrote up 19 entries in all as follows:

1. The immortal Adam Smith (Paras. 1-2)
2. Adam Smith’s First Law (Para. 3)
3. Adam Smith’s Second Law (Para. 4)
4. The logic of the invisible hand (Paras. 5-9)
5. Adam Smith’s dire warning (Paras. 10-14)
6. Smith’s First Law Redux (Paras. 15-16)
7. Adam Smith and the conspiracy of the merchants (Paras. 17-22)
8. Das Wahre Adam Smith-Problem (“The real Adam Smith Problem”) (Para. 23)
9. Adam Smith defends the Jones Act? (Paras. 23-24, and 30)
10. Adam Smith’s defense of targeted tariffs (Para. 31)
11. Adam Smith’s digression on the necessaries of life (Paras. 32-36)
12. Two more Smithian exceptions to free trade: revenge and inertia (Paras. 37-38)
13. Adam Smith’s qualified defense of reciprocal tariffs (Para. 39)
14. Adam Smith’s fourth and final exception to free trade (Para. 40)
15. Adam Smith, absolute advantage, and free trade (Para. 41)
16. The aftermath of the Seven Years’ War and Adam Smith’s defense of natural liberty (Para. 42)
17. Adam Smith on the politics of free trade (Para. 43)
18. Adam Smith’s theory of the second best (Para. 44)
19. Adam Smith on the freedom of trade: a coda (Para. 45)

In my next post, I will say a few more words about Adam Smith’s invisible hand. For now, however, it suffices to say that if the Battle of Britain was Albion’s “finest hour”, [1] then Book IV, Chapter 2 — Adam Smith’s assault against greedy merchants and cunning politicians — is one of Smith’s finest chapters.

[1] After Germany invaded France (10 May 1940), and after the British Expeditionary Force (BEF) was forced to retreat from Dunkirk (26 May to June 4), and after Paris fell to the Nazis (14 June) — in other words, after all hope was lost that Europe would remain free — Winston Churchill delivered a rousing speech to prepare the British people for the trials and tribulations to come: “If the Empire lasts a thousand years men will say, this was their finest hour.”