Adam Smith

"The rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.” Adam Smith, progressive opponent of libertarian "free market" ideology. His "other hand," even less visible today.https://t.co/04XJcQMFSY

— Phil Oliver (@OSOPHER) June 5, 2021

Scottish economist and philosopher Adam Smith (books by this author) was baptized on this day in 1723 in Kircaldy, Fife, Scotland. We don’t know much about his childhood, but it’s rumored that he was carried off — briefly — by gypsies at the age of four. He was absentminded and eccentric, talking to himself often, suffering from imaginary illnesses, and given to such engrossing daydreams that he occasionally walked out of the house in his nightgown.

Smith entered the University of Glasgow in 1737 at the age of 14. After he graduated, he won a scholarship to Oxford, which he found academically lackluster after the dynamic Scottish Enlightenment atmosphere in Glasgow; he largely taught himself while he was there. He became a professor of logic and, later, moral philosophy at the University of Glasgow, and he considered his time there “by far the happiest and most honourable period of [his] life.” His social circle included a chemist, an engineer, a publisher, several successful merchants, and fellow philosopher David Hume.

Smith published his first book, The Theory of Moral Sentiments, in 1759 to general acclaim, but it’s his second, The Wealth of Nations (1776), for which he is chiefly known today. It took him ten years to write, and in it he posits that the pursuit of individual self-interest will lead, as if by an “invisible hand,” to the greatest good for all. He tended to oppose anything — government or monopolies — that interfered with pure competition; he called his laissez-faire approach “perfect liberty.” He’s been painted by some in recent years as a staunch defender of free-market capitalism, supply-side economics, and limited government. Other economists argue that this image is somewhat misleading, and that his devotion to the laissez-faire philosophy has been overstated. For example, he had a favorable view of taxes in general and progressive taxes in particular, as he wrote in Wealth of Nations:

“The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state. … The rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.”

He did argue, however, that the tax law should be as simple and transparent as possible.

Shortly before his death he ordered his unfinished manuscripts and personal papers destroyed, as was the custom in his time. Lost to posterity are volumes on law, science, and the arts. His Essays on Philosophical Subjects was published posthumously. WA

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"Adam Smith (1723-1790) was David Hume's best friend and closest colleague. What Smith shared with Hume was a love of history and literature and a conservative concern for the nature of what we would now call liberal society, with its definitive (if controversial) institution of private property. Most of all, Smith shared with his friend Hume a deep sense of the ultimate importance of ethics and an understanding of human nature. He is best known as the father of the free-enterprise system, and the author of the "bible" of capitalism, ism, An Inquiry into the Causes of the Wealth of Nations (1776). It was the beginning of modern economics and of what we might call the philosophy of the free market system. In Wealth of Nations, Smith gave a partial defense to the long-demeaned demeaned concept of self-interest. The law of "supply and demand" assures us that, with time, the best and cheapest products will earn the richest rewards, and the overall interests of both consumer and manufacturer will be optimized. It was a simple idea, elegant and radical. Self-interest could serve the public good. This did not mean that self-interest interest should now be considered a virtue, however, and there was nothing in Adam Smith to support a "Greed is good" mentality Still, one can easily imagine what a breath of fresh air the citizens of the late eighteenth century must have experienced when they were told, after two millennia of carping on the evils of money and the sins of avarice, that self-interest had its benefits, not just for one but for all. To the delight of novice entrepreneurs, Smith also argued that government, which had hitherto controlled or regulated virtually every major commercial transaction, should not interfere with the economy. "Laissez faire," was the language of the day, "Leave us alone." Smith's proposals also meant that the guilds and guild-like corporations would no longer monopolize industry. Enterprise would now be "free." On the basis of Wealth of Nations, Smith has been widely cited (mainly by those who have not read him) as the classic defender of commercial individualism, of power and profit. The truth is that Smith, years before he wrote Wealth of Nations, published an account of human nature in terms of the moral sentiments, distinctively human feelings that moved men and women to live harmoniously together in society. Thus, despite the booming thesis of Wealth of Nations, Smith believed that people are not essentially selfish or self-interested but are essentially social creatures who act out of sympathy and fellow-feeling for the good of society as a whole. A decent free-enterprise system would only be possible in the context of such a society." A Passion for Wisdom

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In other words, Smith would have rejected the position of people like MTSU's favorite son James McGill Buchanan, and its Political Economy Research Institute...