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# Effect of Prohibition on Gold and Silver Export

## Definition

The economic consequences of legal restrictions on the export of precious metals, which Smith argues are ineffective and counterproductive. Such prohibitions cannot prevent the outflow of bullion when private interests find advantage in exporting it, and instead make the process more expensive and dangerous.

## Source Chapter

Book IV, Chapter 1

## Context

Smith systematically dismantles the mercantile argument for prohibiting gold and silver exports, showing that such laws cannot prevent their movement when profitable opportunities exist. He demonstrates that prohibition merely increases transaction costs and creates smuggling opportunities without achieving the intended goal of preserving national wealth.

## Economic Domain

Regulation

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