Quotation of the Day…

by Don Boudreaux on January 30, 2014

in Adam Smith, Property Rights, State of Macro

… is from Book II, Chapter 1 – on pages 284-285, Vol. 1, of the 1981 Liberty Fund edition – of Adam Smith’s 1776 An Inquiry Into the Nature and Causes of the Wealth of Nations:

In all countries where there is tolerable security, every man of common understanding will endeavour to employ whatever stock he can command in procuring either present enjoyment or future profit….

In those unfortunate countries, indeed, where men are continually afraid of the violence of their superiors, they frequently bury and conceal a great part of their stock, in order to have it always at hand to carry with them to some place of safety, in case of their being threatened with any of those disasters to which they consider themselves as at all times exposed.

In modern commercial economies, enterprising people who are “continually afraid of the violence of their superiors” are victims of what Bob Higgs calls “regime uncertainty.”  In response, of course, these people don’t literally bury their wealth as they would have done in more primitive times and as they likely do still in more primitive societies.  Instead, they refuse to invest (or they invest much less than they would were their property, and their claims to the fruits of the productive uses of their property, more secure).  Enterprise shrinks.  Economies stagnate.  And the consequent reduction in spending is mistakenly accused of being the cause of these economic woes rather than recognized for what it is: a symptom of a deeper, more ‘real’ problem.

The violence that is threatened and unleashed by “superiors” in today’s modern commercial societies is – compared to such violence in more primitive societies – often less blatant and always more elaborately cloaked with philosophical justifications meant to dupe the gullible into mistaking force for consent, theft for (social) contracting, corruption for integrity, private greed for public spirit, and destructive intrusions into market arrangements for productive enhancements of those arrangements.

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