Part I yesterday explained Adam Smith’s notion that general human betterment was the unintended result of each individual following his own self-interest in the market arena of voluntary and competitive exchange. Adam Smith considered such natural order far superior to attempts by government, by those in political power, to design and impose an order and coordination in the actions of the members of society.
Echoing his earlier warnings about the social engineer, that “man of system,” Smith stated:
By pursuing his own interest [the individual] frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good . . .
What is the specie of domestic industry which his capital can employ, and of which the produce is likely to be of the greatest value, every individual, it is evident, can, in his own situation, judge much better than any statesman or lawgiver can do for him.
Editor note: Adam Smith (1723–1790) is considered the father of modern libertarian thought, although economics and political economy have advanced significantly since the 18th century. Many of Smith’s insights have proved prescient, and it is often remarkable how today’s follies bring to mind a quotation or insight from his books, essays, or correspondence.
Smith’s warnings against “the man of system,” for example, apply to today’s Green New Deal and its parts.
Richard Ebeling, a leading scholar in the Smithian tradition, penned this two-part look-back at Adam Smith, which MasterResource reposts this July 4th week.
The Wealth of Nations was published in March 1776, just a few months before the signing of the American Declaration of Independence in July of 1776. If the American Founding Fathers articulated in The Declaration of Independence the political case for individual freedom, Adam Smith presented the complementary argument for economic freedom and free enterprise.…
Editor Note: Ludwig von Mises masterwork, Human Action: A Treatise on Economics, (1949, 1966) is arguably the most important book of 20th century economics. This essay by economist Richard Ebeling, first published by the Future of Freedom Foundation, distills some of Human Action‘s most important themes (also see here).
“Just as there was a huge shift toward more and bigger government in the years leading up to the publication of Human Action, so today we are seeing an expansion of governmental presence and domination of social life, especially in health care, education, and the energy sector — as well as the financial and capital markets.”
September 2019 marks 70 years since the appearance of Ludwig von Mises’s Human Action: A Treatise on Economics, one of the truly great “classics” of modern economics.…