Guess Who?

Quick quiz -- guess who said: "The perfection of police, the extension of trade and manufacturers, are noble and magnificent objects. The contemplation of them pleases us, and we are interested in whatever can tend to advance them. They make part of the great system of government, and the wheels of the political machine seem to move with more harmony and ease by means of them. We take pleasure in beholding the perfection of so beautiful and grand a system, and we are uneasy till we remove any obstruction that can in the least disturb or encumber the regularity of its motions."


Lofty, isn't it? Wondering what power-hungry socialist or leftist authoritarian bureaucrat penned such an ode to "the great system of government"? That would be Adam Smith. Yes, that Adam Smith, the "father of capitalism" and hero of free enterprise proponents around the world.


That particular passage is from Smith's first world-wide best seller Theory of Moral Sentiments, but lest you think that Smith expressed starkly different views of government in Wealth of Nations, or that Theory of Moral Sentiments should be dismissed in light of his Wealth of Nations, here are some selections about government from "the bible of capitalism," Smith's Wealth of Nations.


"The third and last duty of the sovereign or commonwealth is that of erecting and maintaining those public institutions and those public works, which, though they may be in the highest degree advantageous to a great society, are, however, of such a nature, that the profit could never repay the expense to any individual or small number of individuals, and which it therefore cannot be expected that any individual or small number of individuals should erect or maintain."


"When the institutions or public works which are beneficial to the whole society, either cannot be maintained altogether, or are not maintained altogether by the contribution of such particular members of the society as are most immediately benefited by them, the deficiency must in most cases be made up by the general contribution of the whole society."


Government duties, public works, social benefit -- all right there in Wealth of Nations, part and parcel with individual self-interest in Smith's economics. Unlike later so-called "capitalists" who have come to view government as inherently bad and the enemy of prosperous freedom, the father of capitalism portrays self-interest and government not as inherently conflicting but as both having significant roles to play in advancing human benefit.


If you consider Wealth of Nations a valuable source and worth learning from (and Paul and I do, as made plain in our book Better Capitalism), then really learn from it. Learn the robust, well-rounded approach it presents, including an important role that government plays to make the overall system work well. Extolling Wealth of Nations yet condemning government unconditionally makes no more sense than extolling Wealth of Nations yet condemning self-interest unconditionally.


Adam Smith, the father of capitalism, on the role of government

Photo Credit: Andy Feliciotti on Unsplash.com



Of course governments can be flawed, and there are unfortunately no shortage of examples of such flaws. Governments are no more inherently good than they are inherently bad. If we want to pursue greater prosperity, including in the vein of Wealth of Nations, then we have to move beyond polarized shouting matches about the size of government and engage the harder but more productive question of what makes for good government. We recognize this is challenging for so-called "capitalists" who think “good government” is an oxymoron, but again, the father of capitalism not only recognized the possibility of good government but the "pleasure in beholding the perfection of so beautiful and grand a system."


Making government smaller or bigger is easy to debate but missing the point. Making government better is harder to deliver but far more productive. A question to stimulate our thoughts and conversations in this more productive direction: How can we follow the father of capitalism to envision and implement government that is "in the highest degree advantageous to a great society"?


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