A.D. 1689 
1776. 
and 
costly. 
By his 
analysis of 
sxehange 
nd x the 
henefit of 
rade 
PARLIAMENTARY COLBERTISM 
all Englishmen were treated alike; Adam Smith’s objection 
was a purely economic one, as to the expense of attempts 
bo encourage industry, and the loss incurred through the 
misdirection of capital. He attacks all systems for the 
development of a nation’s resources, not on the ground of 
political unfairness, but simply as a matter of economic 
expediency. His reasoning went to show, not only that 
Parliamentary Colbertism had been bad, but that no attempt 
ko reconstruct some better scheme in its place could be 
advisable. 
His new view of the subject matter of the study was all 
important in its bearing on the internal economy of the 
sountry; but still more striking results followed, in regard 
to international affairs, from his analysis of the nature of the 
gain which accrues from exchange. From time immemorial 
men had believed that when a fair exchange took place and 
sach party really gave an equivalent for what he received, 
there could be no gain to either; each was as well off as he 
had been, and if either gained it must be because he had 
not really given an equivalent, but had won something at 
the expense of his neighbour. By bringing out the sub- 
jective aspect of value, Adam Smith showed that in every 
exchange that occurs, both parties gain, more or less; each 
obtains something that is more useful to him than the com- 
modity he has disposed of When this principle is applied 
bo international relations, it appears that there is no need 
50 watch the course of trade with a possible enemy very 
jealously, in order to ensure that foreigners do not gain 
sb our expense; if each nation benefits by trade, there is 
comparatively little reason to scrutinise the balance with 
particular nations closely, and no reason to fear that inter- 
sourse with them is strengthening the sinews of their power 
at the expense of our own. “The wealth” he says “of 
aeighbouring nations, however, though dangerous in wealth 
and politics, is certainly advantageous in trade. In a state 
of hostility it may enable our enemies to maintain fleets and 
armies superior to our own, but in a state of peace and 
commerce it must likewise enable them to exchange with 
us to a greater value and to afford a better market either 
506