ABSTRACT
The chapter on colonies, the content of which will be picked up again in the last chapter of Smith’s work on public debts, contains Smith’s most ferocious attacks against the mercantile system as well as some radical policy proposals. The British Empire for Smith is an apparatus constructed with the treasure and blood of innocent people because of the influence mercantile interests have on the government. Britain should get rid of its colonies either by letting them go or by incorporating them into a union, implying both taxation and representation in Parliament. If not, war will be inevitable. Book IV ends with the description of the other system of political economy: the one of the physiocrats. Their emphasis on natural liberty is right but exaggerated. They require perfect liberty for the system to work. But perfection is not for this world. Their emphasis on agriculture is also right but exaggerated. Manufacturing and trading are also productive activities.
