 Hi there, my name is Don Boudreau. I'm a professor of economics at George Mason University and a senior fellow at George Mason's Mercatus Center and I'm here today to talk about Adam Smith and his views on trade and the economy. So let's get started. Trade policy is always somewhere near the top of policy discussions. So 40 years ago when I was in college people talked about trade, 20 years ago they talked about trade. Never in my lifetime has trade policy been quite as prominent in public policy discussions as it is today as it really has been since just before President Trump won election in November of 2016. And what we've seen in that time is a reemergence of what I call proud mercantilism. Until about five years ago mercantilist beliefs, this notion that imports are bad, exports are good. What we want to do is increase the amount of money we get from foreigners. For whatever reason people at least in the United States were embarrassed to express this view. So you had these mercantilist notions motivating people but a lot of people are clever enough to sort of hide them behind a veneer of reasonable sounding economic explanations. President Trump has led the way or maybe opened the floodgates to a whole raft of people who are now embracing mercantilism and protectionism in an overt way. And a species of protectionism, sort of more virulent species of it is what's called industrial policy. It comes in different flavors in different varieties, different sizes, shapes and odors. But what industrial policy, they all share no matter what version you're considering, is the vigorous and discretionary use of import tariffs and export subsidies to pick winners at home, pick industrial winners in the home economy in an attempt to defeat foreign governments. One of the chief views of mercantilists is that there's a fixed amount of wealth in the world or at least the amount of wealth in the world is largely independent of human institutions and human behavior. And if that were true then no nation could grow wealthier unless another nation or other nations themselves grew poorer. So it was a very zero sum view of the world. And Donald Trump and a lot of the conservatives today who are chiming in with their own schemes and plans for protectionism and industrial policy, they have a very zero sum view of the world. They want America to grow rich and if it's true that the amount of wealth in society is fixed then indeed America can grow rich only by making other countries poorer. Then mercantilists describe the beggar thy neighbor thesis. You can't get rich unless you turn your neighbor into a beggar. Among the many things that Adam Smith shows, this is a nonsense view. The amount of wealth in the world is a fixed amount of wealth in the world grows. It grows as the division of labor expands. We know now it grows as innovation occurs. Occurs, including the amount of real material wealth in our world today of 2020 is unbelievably larger than it was during Adam Smith's day of 1776. And it was larger than what had been a few centuries before that. But Mr. Trump and his conservative allies, they don't understand this. Let me quickly say it's not just conservatives. I mean, there are industrial policy advocates on the left. You listen to Bernie Sanders and Elizabeth Warren on trade and industrial policy and immigration. They don't sound very different than Trump. The style of their language is a bit different, but they're basically endorsing the same policies. We're going to have fortress America. We're not going to let Americans buy as they choose from abroad. We are going to appoint wise and intelligent people to powerful positions in Washington and give them the power to dispense these protections and to dispense subsidies. And somehow that will make us great because if we don't do it, then other countries will be doing it. And so the only way we can compete with other countries is to have our own industrial policy. Adam Smith would have just waved this away as nonsense. Nothing can find very little in Adam Smith, even as an intellectual mention that would support this notion that we need industrial policy. And industrial policy is beneficial or can possibly be beneficial for the country. But if you don't understand how trade works, if you believe that trade is zero sum, if you believe that imports are bad and exports are good, if you don't like economic change, if you are afraid of the future brought about by an open-ended entrepreneurial driven process in which people are free to invest as they peacefully choose and people are free to spend as they peacefully choose. If you're afraid of the future that emerges in this entrepreneurial way, then naturally you want to clamp it down. One way to clamp it down is with industrial policy. But making a mistake to the extent that we use industrial policy, we will make the economy less dynamic. We will make the economies grow less quickly. And we will make the people in the economy less prosperous than they would otherwise be. And if industrial policy is used too extensively, you can actually reverse that. You can actually make us poorer than we are today.