February 10, 2015

Adam Smith's Wisdom

Donald J. Boudreaux

Senior Fellow, F. A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics
Summary

Since 2013, I've taught an annual seminar at George Mason University on Adam Smith's monumental 1776 book, “An Inquiry Into the Nature and Causes of the Wealth of Nations” — the book that is commonly and correctly credited with launching the discipline of modern economics.

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Since 2013, I've taught an annual seminar at George Mason University on Adam Smith's monumental 1776 book, “An Inquiry Into the Nature and Causes of the Wealth of Nations” — the book that is commonly and correctly credited with launching the discipline of modern economics.

Adam Smith (1723-90) was a Scottish moral philosopher and one of the most celebrated scholars in the Western world during his lifetime.

Smith was also a spectacularly good writer. Even today, Smith's prose remains sparkling and accessible. I want to share some of the many gems to be found in “The Wealth of Nations”:

“All [government-created] systems either of preference or of restraint, therefore, being thus completely taken away, the obvious and simple system of natural liberty establishes itself of its own accord. Every man, as long as he does not violate the laws of justice, is left perfectly free to pursue his own interest his own way, and to bring both his industry and capital into competition with those of any other man, or order of men. The sovereign is completely discharged from a duty, in the attempting to perform which he must always be exposed to innumerable delusions, and for the proper performance of which no human wisdom or knowledge could ever be sufficient; the duty of superintending the industry of private people, and of directing it towards the employments most suitable to the interest of the society.”

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“The property which every man has in his own labour ... is the most sacred and inviolable. The patrimony of a poor man lies in the strength and dexterity of his hands; and to hinder him from employing this strength and dexterity in what manner he thinks proper without injury to his neighbour, is a plain violation of this most sacred property. It is a manifest encroachment upon the just liberty both of the workman, and of those who might be disposed to employ him. As it hinders the one from working at what he thinks proper, so it hinders the others from employing whom they think proper. To judge whether he is fit to be employed, may surely be trusted to the discretion of the employers whose interest it so much concerns. The affected anxiety of the law-giver lest they should employ an improper person, is evidently as impertinent as it is oppressive.”

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“There is no art which one government sooner learns of another than that of draining money from the pockets of the people.”

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“Every man is, no doubt, by nature, first and principally recommended to his own care; and as he is fitter to take care of himself than of any other person, it is fit and right that it should be so.”

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“The statesman who should attempt to direct private people in what manner they ought to employ their capitals would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it.”

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“Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to, only so far as it may be necessary for promoting that of the consumer.”