772 B
772 B
Smuggling Trade
Definition
The illegal transportation of goods across borders to avoid customs duties and trade restrictions, which Smith identifies as the most hazardous of all trades but also potentially the most profitable when successful.
Source Chapter
Book I, Chapter 10
Context
Smith uses smuggling as an extreme example of how risk affects profits, noting that while it offers the highest potential returns, it also carries the greatest risk of bankruptcy. He argues that competition among smugglers eventually reduces profits to levels that only barely compensate for the risk involved.
Economic Domain
Exchange