 Hi there. My name is Don Boudreaux. 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. And I'll tell you one item that gives me some credibility in talking about this. Every semester, every spring semester, I teach a course on the wealth of nations, which is the second of Adam Smith's two great books. So let's get started. The wealth of nations, which as I said is the second of Adam Smith's two books, was published in 1776. And it was mainly aimed at debunking what Adam Smith took to be the many fallacies that were at the core of mercantilist policies. He really dislikes it. He just thought it was just nonsense. And he just opens up the cannonade and barrages it. So the title of the book, it's often called the wealth of nations. But the full title, I love the full title, it's an inquiry into the nature and causes of the wealth of nations. So he's inquiring into what causes wealth and what is the nature of wealth. And for both of these things, the mercantilist got it wrong. Most obviously on the nature of wealth, the mercantilist believed that wealth is money. Not that money is a claim on wealth. Not that money is a useful commodity in a commercial society. But that money itself is wealth. And Adam Smith pointed out what shouldn't have to be pointed out to sensible people, but a lot of sensible people missed the fact. He pointed out that wealth is not money. Wealth is access to goods and services, real goods and services, housing, medical care, food, clothing, entertainment, transportation, the things that make our lives rich. Money is a claim on those things. Money is an incredibly useful device for supporting the division of labor that makes the production of wealth possible. But contrary to the mercantilists, Adam Smith taught that money itself is not wealth. It's a surprisingly common misconception that people have. That money is wealth. Adam Smith debunked that brilliantly. In terms of the causes of wealth, Adam Smith pointed out that the causes of wealth, in his view, is a division of labor. People specialize. As people specialize, they become better at what they do. They're more likely to innovate and deal labor saving machinery that allows labor to produce other things that otherwise would be not produced. And the mercantilist got all this wrong. The mercantilists, because they believe that money is wealth, they thought the trade policy should maximize the amount of money in Adam Smith's day, precious metals that flow into the country. And the country becomes rich by getting more precious metals. Adam Smith said nonsense. The country gets rich by encouraging a division of labor. And so imports, rather than being a drain on wealth, which is what the mercantilists generally thought they were, imports Adam Smith pointed out are wealth, are a species of wealth. Imports are real goods and services that make people better off. So Adam Smith wanted to encourage policy or free trade to maximize the inflow of real goods and services. So Adam Smith was, when he wrote the book, and remains to this day the single greatest debunker of mercantilism. It's really a thing to behold, to read it.