The Wealth of Nations · Chapter
V: Of Bounties explained
Smith critiques bounties on exportation, arguing they force industry into disadvantageous channels and, in the case of corn, fail to raise its real value.
What happens
Smith critiques bounties on exportation, arguing they force industry into disadvantageous channels and, in the case of corn, fail to raise its real value. He contrasts bounties on production vs. exportation, discusses the division of labor in trade, and condemns laws that force farmers to act as corn merchants as violations of natural liberty.
Free preview opens on this chapter — companions, themes, and character notes appear beside the text.
Narrative arc
Story tension across the book — this chapter sits in Rising action.
- Setup
- Escalation
- Breaking point
- Aftermath
- Closing
This passage marks the story's dramatic climax because it presents the emotional and psychological peak of Smi…
Full beat labels and climax notes unlock in the reader.
Follow the arc while readingThemes in this chapter
- Free Trade and Market Competition
Smith argues bounties force trade into less advantageous channels, violating natural liberty.
- Role of Government
Critique of laws that obstruct division of labor and interfere with individual interest.
Characters to notice
- Adam Smith
Author and primary voice critiquing bounties and mercantile system.
- The Employer
Implied as the merchant or manufacturer who benefits from bounties.
- A Workman
Referenced in analogy about division of labor and dexterity.
Key passages
“The effect of bounties, like that of all the other expedients of the mercantile system, can only be to force the trade of a country into a channel much less advantageous than that in which it would naturally run of its own accord.”
Bounties, like other mercantile policies, divert trade from its natural, more beneficial path.
Core critique of bounties as distorting market forces.
“The law which obliged the farmer to exercise the trade of a corn merchant, endeavoured to hinder it from going on so fast. Both laws were evident violations of natural liberty, and therefore unjust; and they were both too as impolitic as they were unjust.”
Forcing farmers to also be corn merchants slowed beneficial specialization and violated natural liberty, making the law both unjust and unwise.
Smith condemns legal interference in the division of labor.
