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Mercantile System
A monopoly is any situation in which a single actor controls a specific market. With only one firm able to supply a good or service, there is no competition, so prices rise well above the natural rate, while quality suffers. Monopolies sometimes arise naturally, but are more often enforced through violence, intimidation, and/or the law (like the company monopolies and exclusive trade monopolies that Smith decries).
Monopoly Quotes in The Wealth of Nations
The The Wealth of Nations quotes below are all either spoken by Monopoly or refer to Monopoly. For each quote, you can also see the other terms and themes related to it (each theme is indicated by its own dot and icon, like this one:
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Book 1, Chapter 11
Quotes
To widen the market, and to narrow the competition, is always the interest of the dealers. To widen the market may frequently be agreeable enough to the interest of the public; but to narrow the competition must always be against it, and can only serve to enable the dealers, by raising their profits above what they naturally would be, to levy, for their own benefit, an absurd tax upon the rest of their fellow-citizens. The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined [...]. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it.
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Book 4, Chapter 3
Quotes
Commerce, which ought naturally to be, among nations as among individuals, a bond of union and friendship, has become the most fertile source of discord and animosity. The capricious ambition of kings and ministers has not, during the present and the preceding century, been more fatal to the repose of Europe, than the impertinent jealousy of merchants and manufacturers. The violence and injustice of the rulers of mankind is an ancient evil, for which, I am afraid, the nature of human affairs can scarce admit of a remedy: but the mean rapacity, the monopolizing spirit, of merchants and manufacturers, who neither are, nor ought to be, the rulers of mankind, though it cannot, perhaps, be corrected, may very easily be prevented from disturbing the tranquillity of anybody but themselves.
Book 4, Chapter 5
Quotes
The nature of things has stamped upon corn a real value, which cannot be altered by merely altering its money price. No bounty upon exportation, no monopoly of the home market, can raise that value. The freest competition cannot lower it, Through the world in general, that value is equal to the quantity of labour which it can maintain, and in every particular place it is equal to the quantity of labour which it can maintain in the way, whether liberal, moderate, or scanty, in which labour is commonly maintained in that place. Woollen or linen cloth are not the regulating commodities by which the real value of all other commodities must be finally measured and determined; corn is. The real value of every other commodity is finally measured and determined by the proportion which its average money price bears to the average money price of corn.
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Monopoly Term Timeline in The Wealth of Nations
The timeline below shows where the term Monopoly appears in The Wealth of Nations. The colored dots and icons indicate which themes are associated with that appearance.
Book 1, Chapter 7
...specific regions, the amount that can be produced will never be enough to meet demand. Monopolies also raise market prices well above natural prices “by keeping the market constantly under-stocked.” A...
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Book 1, Chapter 10
...goods. Indeed, professional associations (or corporations) originally formed by paying the king in exchange for monopoly power over a certain trade in a certain area. By keeping the market under-stocked with...
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Book 4, Chapter 1
...Free trade with wealthier Asian countries would enable Europe to grow even more, but the monopolies granted to East India Companies have prevented this trade from ever truly becoming free. Europe’s...
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...(incentives) for key industries, trade treaties with other countries, and colonization (which generally includes a monopoly on trade between a European country and its colonies). The next several chapters will address...
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Book 4, Chapter 2
Import taxes and bans help national industries establish monopolies over particular markets. Such monopolies prop up the British meat, grain, and wool industries. Rather...
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Book 4, Chapter 3
Merchants spread these myths in the hopes of establishing monopolies, and they too often convince governments to do their bidding by banning or heavily taxing...
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Book 4, Chapter 4
...no imports for re-exportation in the first place. But when there is already a trade monopoly—like Britain’s exclusive rights to trade with its American colonies—drawbacks do not increase trade, and only...
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Book 4, Chapter 5
...bounty because they didn’t understand the basic difference between grain and manufactured goods, for which monopolies and bounties do increase real prices (but also waste society’s capital by funneling it into...
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If one company could establish a monopoly over the inland grain trade, it would likely destroy part of the crop and raise...
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Book 4, Chapter 7
...their own risk, with minimal support from Europe—which was more concerned with preserving its trade monopolies than governing America. The only way Europe contributed to the colonies’ formation was by breeding...
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...market for European manufactured goods. In Spain and Portugal, unlike in Britain, the colonial trade’s monopoly effects outweighed its benefits: their colonies were so rich and fertile that capital fled their...
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...nation monopolizes trade with its colonies, and in the East Indies, each European nation assigns monopoly rights over its trade to a particular company. As explained above, the first kind of...
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Company monopolies are often justified on the grounds that only companies have enough capital to support the...
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...has destroyed most of the spice trees and slaughtered the local population to maintain its monopoly on spices, just as the British East India Company has started destroying Bengal’s agricultural land...
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...work autonomously, far from home. Worse still, they use this private power to establish other monopolies and restrict production, against the interests of the country (and the company). The British East...
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Book 4, Chapter 8
...on buying wool, which reduces the wool trade between domestic ports. Wool merchants justify this monopoly by falsely claiming that England produces the highest-quality wool. Together, these restrictions have kept wool...
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Book 4, Chapter 9
...they correspondingly raise the real price of their land’s rude produce. Second, they give a monopoly to domestic manufacturers and merchants, whose profit rates rise. This draws capital away from agriculture...
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Book 5, Chapter 1
...useless, like the Hamburgh, Russia, and Eastland Companies. The Turkey Company imposes a repressive company monopoly on Britain’s trade with Turkey, which discourages people from joining it. These regulated companies have...
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...money—until it amassed an army and started conquering territory in India, giving it a company monopoly. It keeps demanding higher dividends and financial relief from the government. It is poorly managed...
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...companies tend to encourage waste and corruption, start unjust wars, and fail unless they have monopolies (which are justifiable when necessary to create a new branch of trade, but foolish when...
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Book 5, Chapter 2
...high-revenue goods listed above. By administering import taxes this way, maximizing revenues instead of protecting monopolies, and abandoning bounties and drawbacks, Britain could create a far simpler customs system without losing...
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...can’t produce anything else of similar value, or sugar, which is already subject to a monopoly. The new rule would only hurt home brewers, who enjoy unfair advantages under the present...
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...tax farmers (private third-party tax collectors). These tax farmers lobby for harsher tax laws, establish monopolies over certain taxes, encourage smuggling, and pass on the cost of their exorbitant profits to...
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Book 5, Chapter 3
...turned the colonies into a proper taxpaying province. Even the colonial trade is a money-losing monopoly that hurts the people. Thus, if it really wants to cut costs, Great Britain should...
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