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My Dear Friends,
This month you celebrate a separation.
Permit an old friend on the far shore to tell you what I was writing while your founders sharpened their pens.
Your schoolbooks remember the cry: no taxation without representation.
I took that cry seriously.
If America was to help pay for the empire, America had to sit in the legislature of the empire.
Not as a dependent.
Not as a petitioner.
As an equal.
That was my answer: taxation with representation.
But equality would not stop at taxes.
This is an imagined letter from Adam Smith to the Americans of 2026. The letters in this series are constructed from Smith’s own words and ideas, primarily those in “The Theory of Moral Sentiments” and “The Wealth of Nations.” All quotations are verbatim; paraphrases are faithful to Smith’s views. Interested readers can learn more about the sources here.
It would mean freer trade across the whole empire.
It would mean American representation growing with American wealth and numbers.
And it would mean that, in the natural course of things, the seat of empire itself might cross the Atlantic—and London might one day answer to you.
That was the part Britain could not bear.
Let me explain.
The grievance was just
Begin with what your founders got right.
A legislature that reaches into a people’s pockets while denying them a seat in its councils treats them not as members, but as subordinates.
But I did not think the colonies owed Britain nothing. The last war had been fought, in no small part, to secure them against European rivals, and at Britain’s expense. It was not contrary to justice that America should help discharge the debt.
The fault was never the tax. It was the exclusion.
The door
So I proposed a door that Britain would not walk through.
Let the colonies send members to Parliament—in fair and proportional numbers, their seats increasing as their wealth and population grew. Let the suffocating web of trade restrictions fall away, so that a merchant in Boston traded as freely as one in Bristol or Glasgow.
One market. One legislature. One empire, with the American voice growing louder precisely as America grew greater.
When I published this in 1776, I meant every word—including the part about the seat of empire. Everything I could observe of the New World told me that your wealth and numbers could one day surpass Britain’s own. A union of equals would not remain a union centered on London.
My countrymen found the idea absurd.
I found it arithmetic.
Why the door stayed shut
Why did the door to full representation and free trade never open?
Not merely because of tyranny. Tyranny is the easy answer.
The more useful answer begins with interest—the oldest enemy in all my letters to you. A whole class of British merchants had grown rich on the monopoly of your trade: buying your goods cheap because you could sell nowhere else, selling you theirs dear because you could buy nowhere else.
And mark this well: the monopoly did not enrich Britain. It enriched particular merchants at Britain’s expense—British families paid more for what they bought, so that one class of traders could be spared the inconvenience of competition. Free trade threatened nothing but their privilege.
Open the ports and seat you in Parliament, and their privilege evaporated. The protected merchants did not argue against justice. They never do. They argued that the monopoly was necessary—for the trade, for the navy, for the empire itself.
Privilege always borrows the language of the public good.
And the door stayed shut because of pride. The notion that Britons might one day be governed from a city on the American shore was, to London, not an argument at all. It was an affront.
Interest can sometimes be compensated. Pride must be humbled.
Here is the bitterest part. Britain sought to keep you under the old terms because it imagined dominion over America was a treasure. It was not. I did the arithmetic: in war you were a drain, in peace barely a wash. The empire Britain imagined in America was not a gold mine. It was the dream of one—a glittering idea that always cost more than it returned.
The verdict
Let me state my verdict plainly, for it is often remembered falsely.
I never argued that colonies should enjoy the benefits of empire while refusing every burden. If America shared in the security of the empire, America could be asked to share in its expense.
But burdens and power had to travel together.
If Britain wanted American taxes, it had to accept American representation.
If it wanted American commerce, it had to accept freer trade.
If it wanted Americans as members of the empire, it had to treat them as equals.
I ended the Wealth of Nations with a plea to my own rulers: “It is surely now time that our rulers should either realize this golden dream . . . or, that they should awake from it themselves.”
If they could not realize it, then the matter was plain.
Give them seats—or give them up.
Britain chose neither.
And so you chose for it.
A word for those who fear
Once the door was bolted, independence was no folly. It was the only remedy left.
When a young countryman lamented to me, in the dark days of the war, that the loss of America must be the ruin of Britain, I answered:
There is a great deal of ruin in a nation.
That is the comfort. Britain lost thirteen colonies and went on to prosper.
But inside the comfort sits a warning. Because a nation can survive so much, its people come to believe it can survive anything. Britain did not lose America to a stronger rival. It threw away half an empire for a merchants’ monopoly and a nation’s pride. Neither enemy died in 1783.
So, America, guard the thing your founders actually won. They did not win freedom from taxes; you still pay them. They won the principle that those who bear taxes must share in the power that imposes them.
Your founders were refused seats in Britain’s Parliament.
So they built a chamber of their own—and left a seat in it for you.
Guard that seat.
Your humble servant,
Adam Smith
Ross Levine is the Booth Derbas Family/Edward Lazear Senior Fellow at the Hoover Institution and co-director of Hoover’s Financial Regulation Working Group. He is a founding member of the Hoover Program on the Foundations of Economic Prosperity. Levine is also a research associate at the National Bureau of Economic Research.