by Gary M. Galles via FEE
Important people are commemorated on their birthdays. But some birthdays are unknown, like Adam Smith, history’s most famous economist. However, we know he was baptized on June 5th, making that an appropriate date to remember him on.
Smith is most famous for articulating how the “invisible hand” of market interactions can coordinate a society based upon liberty—i.e., private property and voluntary exchange—more effectively than the coercive power of the state. Unfortunately, Smith’s crucial insights are overlooked by politicians who may talk of liberty, but legislate and regulate away its centerpiece—voluntary arrangements. That is why we must also recall his understanding of government, the coercive “panacea” proposed for every problem, real or imagined, in society.
“[Governments are] …without exception, the greatest spendthrifts in the society.”
“The agents of [government] regard the wealth of their master as inexhaustible; are careless at what price they buy … at what price they sell.”
“Those unproductive hands … may consume so great a share … that all the frugality and good conduct of individuals may not be able to compensate … this violent and forced encroachment.”
“The profusion of government … [has] retarded the natural progress.”
“After all the proper subjects of taxation have been exhausted, if the exigencies of the state still continue to require new taxes, they must be imposed upon improper ones.”
“There is no art which one government sooner learns of another than that of draining money from the pockets of the people.”
“The uniform, constant and uninterrupted effort of every man to better his condition … is frequently powerful enough to maintain the natural progress of things toward improvement, in spite both of the extravagance of government, and of the greatest errors of administration … surmounting a hundred impertinent obstructions with which the folly of human laws too often encumbers its operations.”
“In the midst of all the exactions of government … It is this effort, protected by law and allowed by liberty to exert itself in the manner that is most advantageous, which has maintained the progress.”
“Let us not, however, upon this account rashly conclude that she is capable of supporting any burden, nor even be too confident that she could support, without great distress, a burden a little greater than what has already been laid upon her.”
“No human wisdom or knowledge could ever be sufficient [for] the duty of superintending the industry of private people … towards the employment most suitable to the interest of the society.”
“Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things.”
“All systems either of preference or of restraint … 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 in his own way, and to bring both his industry and capital into competition with those of any other man.”
“The statesman who should attempt to direct private people in what manner they ought to employ their capitals, would … 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.”
Adam Smith long ago recognized that “natural liberty,” which resulted from eliminating unjustified preferences and restraints, needed a government far smaller than one requiring innumerable regulations and mandates as well as trillions of dollars of taxes each year. If we are to restore the vision he shared with our Founders—providing the broadest possible canvas for human freedom—far less folly and presumption from government is necessary, allowing us to make more use of the invisible hand of mutually beneficial, voluntary market arrangements.
Gary M. Galles is a professor of economics at Pepperdine University. His recent books include Faulty Premises, Faulty Policies (2014) and Apostle of Peace (2013). He is a member of the FEE Faculty Network.
This article was originally published on FEE.org. Read the original article.