Thank you so much for that! One more quick question for you. This comes out of Wealth of Nations:
“By means of such regulations, indeed, a particular manufacture may sometimes be acquired sooner than it could have been otherwise, and after a certain time may be made at home as cheap or cheaper than in the foreign country. But though the industry of the society may be thus carried with advantage into a particular channel sooner than it could have been otherwise, it will by no means follow that the sum total, either of its industry, or of its revenue, can ever be augmented by any such regulation. The industry of the society can augment only in proportion as its capital augments, and its capital can augment only in proportion to what can be gradually saved out of its revenue. But the immediate effect of every such regulation is to diminish its revenue, and what diminishes its revenue is certainly not very like to augment its capital faster than it would have augmented of its own accord, had both capital and industry been left to find out their natural employments…”
I’m assuming Smith is saying that when you grant a domestic company a monopoly (by banning foreign exports of that product), the company MIGHT be able to end up making the product cheap or cheaper than in the foreign country. However, this won’t increase sales.
I don’t understand how granting a company a monopoly can ever lead to cheaper prices…am I misunderstanding what he’s saying?