Adam Smith and the Current Economic Crisis

The following two quotations from Smith’s Wealth of Nations (1776) speak to our current economic malaise with magisterial prescience. They could be summarized as (1) nobody hates capitalism more than capitalists and (2) think carefully before you make a law to benefit a private enterprise. Asking the legislature to think under any condition is probably a request beyond the possible.

1. People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public or some contrivance to raise prices.

2. The interest of the dealers, however, in any particular branch of trade or manufacture, is always in some respects different from, and even opposite to that of the public. To widen the market and to narrow the the competition is always the interest of the dealers. To widen the market may frequently be agreeable enough to the interest of the public; but to narrow the competition must always be against it, and can serve only to enable the dealers, by raising their profits above what they would naturally be, to levy, for their own benefit, an absurd tax upon the rest of their fellow-citizens. The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men whose interest is never exactly the same with that of the public, who generally have an interest to deceive and even to oppress the public, and who accordingly have upon many occasions both deceived and oppressed it.

Of course,were Smith around today he likely would put many other groups which regularly petition the Congress in the same box with the dealers; most unions would qualify for inclusion. The public, alas, yearns to be deceived. Were it otherwise no politician would ever be re-elected.

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One Response to Adam Smith and the Current Economic Crisis

  1. “The public, alas, yearns to be deceived. Were it otherwise no politician would ever be re-elected.”

    And in far more ways than politics. Look at what passes for music, art, and science.

    Here in California, the state unions control the willing legislature, and we should be bankrupt soon.

    Time for an Atlas Shruggedville.

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