prior probability

[Update: Yesterday afternoon (9 April), President Trump reduced his country-specific tariffs down to a universal 10% rate for all trade partners, except for China. See here, here, and here. Note: Trump’s universal 10% baseline rate went into effect today; only the higher tariffs — except for those on China –were postponed.]

At the very end of my previous post, I mentioned the sacrilegious possibility that, were he alive today, the great Adam Smith — patron saint of free trade and free markets — might actually defend Trump’s new round of tariffs on both humanitarian and instrumentalist grounds. So, what are these Smithian arguments, and are they persuasive?

Spoiler alert: I can say right off the bat that Smith’s humanitarian exception cannot be used to defend Trump’s tariffs. Why not? Because this exception is limited to trade barriers that are already on the books. It does not apply to new tariffs like Trump’s! Specifically, Smith’s humanitarian argument appears in Book IV, Ch. 2, para. 40 of The Wealth of Nations, where Smith concedes that “freedom of trade should be restored only by slow gradations, and with a good deal of reserve and circumspection” when the sudden removal of existing restrictions on trade would cause mass unemployment at home. In other words, Smith is willing to tolerate pre-standing trade barriers for a limited time in order to protect those workers who would otherwise lose their jobs if those restrictions were lifted all at once.

To recap, Smith’s humanitarian justification of existing tariffs is limited in scope: it applies only to tariffs that are already in place, not to new ones! That still leaves Adam Smith’s instrumentalist argument, however, which is going to be much harder to dismiss. I will turn to Smith’s instrumentalist exceptions in my next post.

Previously, I have surveyed Adam Smith’s four exceptions to free trade in Book IV, Chapter 2 of The Wealth of Nations (see my recap here), but at the same time I have left open the $64 question of their application to our contemporary times. Do any of President Trump’s “beautiful” new tariffs, for example, fall into any of Smith’s free-trade exceptions? Alas, this is not an easy question to answer because of the bewildering variety and sheer breadth of protectionist policies that Trump has despotically imposed by decree during the first 10 weeks of his second term. For a good overview of Trump’s “trade despotism” (my term), see this Wikipedia page on Tariffs in the second Trump administration.

For starters, let’s consider the centerpiece of Trump’s new mercantilism: a 10% across-the-board tax on imports from all nations. Recall that last week (2 April 2025), Trump signed a sweeping executive order imposing a minimum 10% tariff on all U.S. imports, including higher tariffs, ranging from 11% to 50%, on imports from 57 nations. For reference, here is the full text of Trump’s executive order. [*] Although there is a good chance this unilateral decree will be declared ultra vires (i.e. beyond the president’s Article II powers) by the courts, in the meantime, however, allow me to play the Devil’s advocate (advocatus diaboli). Brace yourselves, for in my next few posts I will try to pass — nay, ace! — Bryan Caplan’s demanding “ideological Turing test” by considering several arguments that Adam Smith, were he alive today, might have made to defend Trump’s 10% tariff!

[*] Update: President Trump postponed all his country-specific higher tariffs — except for those on China — for 90 days, but the 10% baseline tariff still applies to most goods imported into the United States. My understanding is that the 10% baseline rate was NOT postponed.

I hate to be “that guy” — especially among my fellow libertarian friends — but the more I study the law and economics of tariffs in U.S. history, the more I realize that my colleague and co-author (see here) Salim Rashid is most likely right about the limited influence of Adam Smith’s Wealth of Nations on economic policy during his (Smith’s) own lifetime (see here, for example), and the more I can begin to comprehend the popular appeal of President Trump’s pro-tariff policies. For a good overview of the history of tariffs in the United States, see here. Alas (spoiler alert), tariffs and protectionist policies at the national level were the norm, not the exception, when our republic was founded.

Two cases in point are James Madison’s Tariff Act of 1789 — the first major law passed by the first Congress! — and Alexander Hamilton’s 1791 Report on Manufactures. (The full text of Hamilton’s report is available here. ) Although Hamilton’s proposals for government bounties to promote domestic industries failed to receive support from Congress, virtually every tariff recommendation put forward in the report was adopted in the five-page Tariff Act of 1792. (See here.) That said, any intellectually-honest person has to agree that Adam Smith’s general argument against trade barriers is still spot on. The “problem” for us free traders, however, is that Smith himself made several pragmatic exceptions to his general free-trade rule. I will explore whether Trump’s new round of tariffs, including his 10% across-the-board tax on imports from all nations, falls into any of Smith’s exceptions in a future post.

In anticipation of my talk at an upcoming symposium this spring on “The Age of Trump: Projecting Policy and Legal Impacts in a Second Term” at the University of Saint Thomas (UST), I began blogging on Adam Smith’s timeless argument in favor of the “freedom of trade” with my 5 February post The Immortal Adam Smith. (FYI: I compiled my first set of Adam Smith-inspired blog posts 11 days later; see The ghost of Adam Smith.) In addition, I subsequently blogged about Smith’s four exceptions to free trade. For reference, links to my second set of Smith trade posts are assembled in one place below:

1. Adam Smith defends the Jones Act?
2. Smith’s defense of targeted tariffs
3. Smith’s digression on the necessaries of life
4. Two more Smithian exceptions to free trade: revenge and inertia
5. Smith’s qualified defense of reciprocal tariffs
6. Smith’s fourth and final exception to free trade
7. Adam Smith, absolute advantage, and free trade
8. The aftermath of the Seven Years’ War and Adam Smith’s defense of natural liberty
9. Adam Smith on the politics of free trade
10. Adam Smith’s theory of the second best

I then concluded my series on Adam Smith’s exceptions to free trade on 1 March with this post: Adam Smith on the freedom of trade: a coda. The question that I will leave as an exercise for the reader is this: does current U.S. trade policy fall within any of Smith’s pragmatic exceptions?

That is the title of a new documentary film (in Spanish) about the life of my beloved aunt, the Cuban poet Julie Pujol Karel. Details below:

Update (9 April): here is a link to the documentary.

For the record, I am interrupting my multi-part plea to Adam Smith scholars — i.e. my series on the dos and don’ts of citing the Scottish philosopher’s “Lectures on Jurisprudence” — to share the following public service announcement: classical liberalism > mercantilism

PS: Will the courts — or the Congress! — declare Trump’s “liberation day” tariffs illegal? (See here or here, for example.) In the meantime, we can only hope that these tariffs are just a Trumpian negotiating tactic or calculated trade-policy ploy (see here) to get other countries to open their markets and agree to unconditional free trade.

As I have mentioned in my previous two posts, my plea to my fellow Adam Smith scholars is simple: stop citing the “Lectures on Jurisprudence” without proper qualification or a disclaimer. Even if those lecture notes were totally accurate — i.e. even if they were to contain a word-for-word transcription of Smith’s law lectures from the early 1760s — it is likely that the Scottish philosopher may have refined — or perhaps even repudiated — the ideas in those lecture notes.

Why do I say this? Because Smith was working on a separate book on a “theory of jurisprudence” for over 30 years — a major intellectual project that no doubt must have sprung from his aforementioned law lectures while he was still a professor at the University of Glasgow — but at the same time, he decided against its publication. Even as late as the 6th and last edition of The Theory of Moral Sentiments (published in 1790), Smith himself refers to this third great work (emphasis added by me):

“In the last paragraph of the first Edition of the present work [published in 1759], I said, that I should in another discourse endeavour to give an account of the general principles of law and government, and of the different revolutions which they had undergone in the different ages and periods of society; not only in what concerns justice, but in what concerns police, revenue, and arms, and whatever else is the object of law. In the Enquiry concerning the Nature and Causes of the Wealth of Nations, I have partly executed this promise; at least so far as concerns police, revenue, and arms. What remains, the theory of jurisprudence, which I have long projected, I have hitherto been hindered from executing, by the same occupations which had till now prevented me from revising the present work. Though my very advanced age leaves me, I acknowledge, very little expectation of ever being able to execute this great work to my own satisfaction; yet, as I have not altogether abandoned the design, and as I wish still to continue under the obligation of doing what I can, I have allowed the paragraph to remain as it was published more than thirty years ago, when I entertained no doubt of being able to execute every thing which it announced.”

Although we don’t know for sure, it is natural to assume that Smith’s “Lectures on Jurisprudence” (LJ) was the original source material of this third great book he was working on for so many years, his book on jurisprudence. Alas, the manuscript of this work not only remained incomplete when Smith died in July of 1790; Smith also specifically instructed his literary executors — the chemist Joseph Black and the geologist James Hutton, both of whom are pictured below — to destroy it, and they carried out Smith’s dying wish just days before his demise! (See, for example, page 434 of John Rae’s Life of Adam Smith, available here.)

Smith’s desire to keep his unfinished book on jurisprudence from seeing the light of day thus raises an intriguing possibility: that his decision to destroy his manuscript was, in fact, Smith’s last word about his theory of jurisprudence. In other words, Smith had his unfinished book thrown into his literary bonfire not because his work was incomplete or unfinished but because his views had changed or because he had nothing more to say on this subject, i.e. beyond what he had already written in Book V of The Wealth of Nations. If either of these conjectures is correct, why are we still citing LJ? That said, I will nevertheless identify two narrow circumstances, by way of exception, in which citing LJ would be justified.

File under: Not April Fools!

As a follow-up to my previous post, there are at least two reasons why scholars of Adam Smith should be more cautious when citing the so-called “Lectures on Jurisprudence” (LJ). To begin with, those student lecture notes from the early 1760s are not even Adam Smith’s. They were transcribed by one or more of Smith’s students and discovered over 100 years later, so we have no way of knowing just how faithful or accurate those student notes are.

To mention just one egregious example, the second set of Smithian law lecture notes are dated 1766 (see here, here, or here, for instance), even though Adam Smith himself was in Paris for most of 1766, not delivering law lectures at the University of Glasgow. In fact, he had stopped lecturing at the end of 1763 and had formally resigned his Glasgow professorship for good in February of 1764.

The other reason why Adam Smith scholars should avoid citing LJ is even more significant. Like his lectures on natural religion, Smith’s law lectures may not represent the Scottish philosopher’s own ideas at all. I will explain why in my next post.