Adam Smith’s thought (the real Adam Smith, that is) has been famously
characterized by the economist George Stigler as a "stupendous palace
erected upon the granite of self-interest." I have long
labeled
this a "mischaracterization," and I am now pleased to report that
I am in good
company.
To be sure, "self-interest" is a real phenomenon, albeit a rather
humdrum one. Of far greater significance to Smith’s thought, and his
intellectual legacy, was his bedrock—and spectacularly uncommon at the time—belief
that individuals, even the impoverished and unschooled, knew and understood their
own best interests far more keenly than the wise and virtuous classes
that were then readily perceived as their betters.
This core
faith in the judgment of every individual is the foundation upon which
Smith rests his aversion to heavy-handed governmental intervention
in the economy: It is not (just) a "positive" argument Smith
is making against excessive government involvement (i.e., the argument
that the government tends to get it wrong, and that its interventions
have pernicious unintended consequences); rather, it is primarily a
"normative" argument (namely that the intelligence and autonomy of
each individual should be minimally interfered with, and then only
for the most compelling reasons and where there are no meaningful "less
intrusive" alternatives).
In his crystal-clear but inimitable prose:
“It is the highest impertinence and presumption… in kings
and ministers, to pretend to watch over the oeconomy of private people,
and to restrain their expence either by sumptuary laws, or by prohibiting
the importation of foreign luxuries. They are themselves always, and
without any exception, the greatest spendthrifts in the society. Let
them look well after their own expence, and they may safely trust private
people with theirs.”
Need I add that these observations are of wide applicability today? (Can
anyone say, "school vouchers," where the wise and virtuous classes
would deny poor parents the educational choice they themselves enjoy
for their privileged children?)
But enough editorializing for this quarter; in case you hadn’t picked
up on it, I am a profound and enthusiastic admirer of the original
AS.
And yes, I do believe he’d have his own blog today.
