Adam Smith explains why crime does not pay

To my North American readers, Happy Labor Day Weekend! Now, to the business at hand. This past week we have been surveying how Adam Smith uses lotteries in Book I, Chapter 10 of The Wealth of Nations — actual state-run lotteries and metaphorical ones — to describe our risk-taking behavior at an individual level, e.g. why we buy lottery tickets, why we neglect or under-insure against the occurrence of certain types of remote but real risks, and why we join certain trades and professions. But Smith saves the best for last. In Paragraph 33 of Book I, Ch. 10, Smith draws a direct connection between profits and risk: “In all the different employments of stock, the ordinary rate of profit varies more or less with the certainty or uncertainty of the returns. These are in general less uncertain in the inland than in the foreign trade, and in some branches of foreign trade than in others; in the trade to North America, for example, than in that to Jamaica. The ordinary rate of profit always…