Adam Smith’s slam dunk critique of farm subsidies

Nota bene: This post is my next installment of my multi-part review of Adam Smith’s 1784 pamphlet Additions and Corrections to the First and Second Editions of Dr. Adam Smith’s Inquiry into the Nature and Causes of the Wealth of Nations. After exploring the markets for tobacco, textiles, and wine (see here), Smith devotes the next three “Additions and Corrections” (#7, #8, and #9) of his pamphlet to the market for wheat. More specifically, what was the cause of the gradual fall in the average price of grain, and what would be the net effect of giving grain farmers a bounty or subsidy? To begin, in Addition #7 Smith concludes, “It seems to be altogether impossible that the bounty could ever contribute to lower the price of grain.” (Smith 1784, p. 10) Instead, he draws a direct connection between the price of grain and the value of silver: “It has happened in France, as well as in England, though in France there was, not only no bounty, but, till 1764, the exportation of corn was…