# Digression Concerning the Corn Trade and Corn Laws explained — The Wealth of Nations

> Chapter companion for The Wealth of Nations by Adam Smith.

## What happens

This chapter examines the economic effects of laws regulating the corn trade, arguing that restrictions on the inland corn dealer and the farmer's forced dual role as merchant hinder agricultural improvement and violate natural liberty. Smith contends that free trade in corn, both domestically and internationally, is the best preventative of dearth and famine, and criticizes the mercantile system's export bounties and import restrictions as counterproductive.

## Themes in this chapter

### Free Trade and Market Competition

Smith argues for free exportation and importation of corn, comparing it to the freedom of inland trade, as the best preventative of dearth and famine.

### Role of Government

Criticizes laws that force farmers to act as corn merchants or prohibit manufacturers from retailing, calling them violations of natural liberty and unjust.

### Division of Labor

Highlights the advantage of dividing stock and labor into single branches, as seen in the corn merchant's specialization versus the farmer's forced dual role.

## Character check-ins

### The Farmer

Discussed as being forced by law to act as a corn merchant, dividing his capital and hindering cultivation.

### The Corn Merchant

Presented as a beneficial middleman whose trade supports the farmer and improves corn supply.

### The Wholesale Dealer

Used as an analogy to illustrate how a ready market supports the manufacturer, similar to the corn merchant's role.

### The Manufacturer

Referenced in comparison to the farmer, prohibited from retailing his own goods to encourage division of labor.

### Great Britain

Mentioned as having frequently resorted to temporary laws prohibiting export and reducing import duties, showing the impropriety of its general system.

## Key lines

> The law which prohibited the manufacturer from exercising the trade of a shopkeeper, endeavoured to force this division in the employment of stock to go on faster than it might otherwise have done. The law which obliged the farmer to exercise the trade of a corn merchant, endeavoured to hinder it from going on so fast. Both laws were evident violations of natural liberty, and therefore unjust; and they were both too as impolitic as they were unjust.

Laws that forced manufacturers to avoid retailing aimed to speed up the division of capital, while laws that forced farmers to act as corn merchants slowed it down. Both were unjust violations of natural liberty and also bad policy.

_Smith condemns both types of legal interference as contrary to natural liberty and economic efficiency._

> The unlimited freedom of exportation, however, would be much less dangerous in great states, in which the growth being much greater, the supply could seldom be much affected by any quantity of corn that was likely to be exported.

Unrestricted export is far less risky in large countries because their large production means exports rarely threaten domestic supply.

_Smith argues that large nations like France or England can safely allow free corn export, unlike small states._

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