22 lines
934 B
Markdown
22 lines
934 B
Markdown
<!-- generated: provider=openrouter model=arcee-ai/trinity-large-preview:free date=2026-02-19 source=book-4-chapter-01 -->
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# Balance of Trade
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## Definition
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The difference between the value of a nation's exports and imports over a given period. Under the mercantile system, a favourable balance (exports exceeding imports) was believed to increase national wealth by bringing more gold and silver into the country, while an unfavourable balance was thought to drain wealth away.
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## Source Chapter
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Book IV, Chapter 1
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## Context
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Smith critiques the mercantile obsession with the balance of trade, showing how merchants and governments wrongly believed that a country's prosperity depended on maintaining a favourable balance. He demonstrates that this focus on precious metals rather than actual production and consumption led to misguided policies like export bounties and import restrictions.
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## Economic Domain
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Exchange
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---
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