I don't know of an exact law in Smith, but at WN I.3.3 he writes: "As by means of water-
carriage a more extensive market is opened to every sort of industry than what land-
carriage alone can afford it, so it is upon the sea-coast, and along the banks of
navigable rivers, that industry of every kind naturally begins to subdivide and improve
itself, and it is frequently not till a long time after that those improvements extend
themselves to the inland parts of the country." Then in Book III.3.13 Smith describes how
institutional factors may corrupt this "natural" subdivision ("But those of a city,
situated near either the sea-coast or the banks of a navigable river, are not necessarily
confined to derive them from the country in their neighbourhood.They have a much wider
range, and may draw them from the most remote corners of the world, either in exchange for
the manufactured produce of their own industry, or by performing the office of carriers
between distant
countries, and exchanging the produce of one for that of another.")  
  
Eric Schliesser