ABSTRACT
Smith defines the Wealth of Nations as a violent attack against the mercantile order. Book IV contains his explicit attacks. The injustices and inefficiencies of the British mercantile empire are all traceable to what today we would call powerful lobbies. Their claim is that improving the balance of trade, thus increasing the amount of precious metals in Britain, is for the good of the country. But in reality, it is just for the good of merchants and manufacturers. Restricting trade with drawbacks, bounties, and treaties of commerce are all examples of how special interest groups are able to capture the legislation to benefit themselves at the expense of all their fellow citizens. It is in this section that the famous “invisible hand” makes its presence. Mercantile interests claim that directing capital toward them would benefit the whole country. For Smith this is nonsense. Capital is led by an invisible hand to the most efficient and just allocation. There is no need for the “folly and presumption” of who promotes “useless or hurtful regulation” under the banner of “public good” while it is for their own benefit at the expense of society.
