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Errors from Misreading of Adam Smith- Not more than an Inquiry into the Wealth of Nations, and based on implicit Assumptions, based on Level of Technology, and the Conditions in the World

There are some implicit assumptions in Adam Smith's Inquiry into the Wealth of Nations. The period is around 1776 to 1787, it reflects most of the eighteenth and also with some changes the nineteenth century. The defense and security of the realm. Smith totally supports this, so does Britain. Britain is not to allow Dutch naval power to emerge stronger in ways that affect British interests. On colonies the view that you own them is not questioned. The views on control vary with the level of development of the colony controlled. The control of markets of colonies or settlements controlled  by force is not questioned. The sourcing of supplies for trade in areas controlled by force is not questioned from Dutch to the British. Offering some improvements in the colonies such as rail or other construction does not change the basic structure. 

Once established the goal of setting this up on a superior basis with advances in technology was never questioned. The shipyards and the supply chain for shipyards was critical. Advances for the number of guns on ships, the technical advances for production in shipyards as shown by Knight are essential, some of these advances can be compared to the way a Boeing production line operates for a 737 or 767 aircraft with continuous improvement. British authority on this period Roger Knight documents this in his book "Britain Against Napoleon The Organization of Victory 1793-1815.

It was accepted that there would be continued specialization for improvements in manufacturing. Frenchman Turgot also expressed similar ideas. The idea at the time of Smith was how to advance from here, the point at which they were in late eighteenth century. It was all about how to advance from that level to setting up the industrial base of Britain. This was to evolve along three lines. First, the manufacture of steel. Second, the manufacture of steam ships, the manufacture of steam engines for railways. Third the manufacture of equipment for agriculture. For this to happen the Dutch East India Company or British East India Company as monopolist was a form of capricious structures and behaviour, that would not help accomplish these goals. For improvements Smith says the shift had to be the monopoly of the East India Company to colonies acquisition and use for trade to be shifted to the state power of Britain. This happened by the mid-nineteenth century to secure Britain's position in world trade and commerce under imperial and parliamentary authority.

When Smith says imports are a way to bring competitive products into the country to improve local manufacturing, he is looking at a country where imports were almost nonexistent. He never intended a flood of imports in a situation where imports already controlled large parts of markets as we have by 2000 and continuing in 2020. Technology at the time in transport is also figured into this. Transport at that time was very slow and cumbersome. From Edinburgh to London transport of goods and merchandise took 6 weeks.  Compare that with the situation in the decades after World War II when the first ships emerged that could carry large numbers of containers of merchandise which could be unloaded quickly with advanced equipment and shipped by rail or truck in days to destinations. This was true for Japanese cars and Chinese products. Consider Smith's basic and major assumptions in the context of the technology of transport and the situation at the time. It was never questioned that capital remains in the country, it never leaves except in ways that it assuredly comes back, and he wants it where he can see it is safe at home. This capital was to be redeployed in a growing country.. Britain was a growing country. Countries needed to strive for this situation to set the conditions to  continue to grow.

Britain was growing precisely because of colonies in the east and the west, wealth generated in trade was applied to enlarging industry, to advancing science and technology. Growth with improvements in agriculture was part of this. And growing from improvements in liberty, as free citizens were able to leave feudal structures and obligations where they were tied to the land.

When Smith said allow imports, imports were almost nonexistent. He was careful to say trying this out gradually. Conditions in transport were to limit this even if parliament or the monarch were to open up the country to imports. It was very gradual because of the level of technology in transport. Consider that it took 6 weeks by horse drawn goods wagon from Edinburgh in Scotland to London and back. This was in the 1750's. Smith was born in 1723 in Scotland's Glasgow area, when Glasgow's port with expanding British trade was to become one of the fastest growing ports of the world. As part of the Scottish Enlightenment he reasoned that opening up gradually would benefit Britain. Yet he is only saying do this very, very gradually, very slowly and see how this works. See if this beneficial for the employment of labour. Smith's belief is that the employment of labour in the home country is of decisive importance. He never questions this. What can we learn from this?