Quotation of the Day…

by Don Boudreaux on July 23, 2016

in Adam Smith, Growth, Man of System

… is from page 79 of Thomas Leonard’s excellent 2016 book, Illiberal Reformers (link added):

For as long as people have recorded their views on economic life, there have been two constants of political economy.  The first constant has been to distinguish two opposed methods of economic coordination: market exchange and administrative command.  The second constant has been to scorn markets and to esteem administration.

Hostility to trade is as venerable as trade itself.  During the roughly two millennia that separate the students of Socrates from Adam Smith’s Wealth of Nations (1776), the market was scorned as a disreputable demimonde of moneychangers, pawnbrokers, Shylocks, usurers, factors, gougers, hagglers, hawkers, hucksters, jobbers, middlemen, mongers, peddlers, shopkeepers, and scrambling little profiteers. The low regard for the market was conveyed by the epithets given to its participants.

The scholars who maligned markets admired administration.  Administration was favored by Greek philosophers grooming tyrants, theologians vindicating the Church, political arithmeticians calculating for lord protectors, the man of system whispering in the ear of princes and parliaments, and even trading companies, once they snatched the sovereign powers of the governments that gave them their monopolies.

Isn’t it, therefore, strange that those politicians, pundits, professors, and preachers who today wish to turn more power over to state administrators (and, hence, to reduce the range of market activities) call themselves – and are called by others – “Progressives”?  These champions of administration – these ‘men of system’ – are not progressive; they are regressive.  They are atavistic.  They peddle millennia-old superstitions; they work with outdated concepts; they possess an antediluvian faith in strong ‘leaders’; they have never learned the modern lesson of spontaneous order; they are haunted by archaic fears of people who are free to pursue their own ends, in their own manner, without supervision by overlords.

The modern world in which dignity for the first time began to be spread to ordinary people arose only a couple or three centuries ago.  The modern economy in which material and cultural riches for the first time began not only to increase steadily but also to be shared by ordinary people arose only a couple or three centuries ago.  True progress occurred not through a doubling-down on diktats from lords and ‘leaders’ and weapons-wielding commandants but from freeing ordinary individuals to choose and act as each chooses to act within an institutional framework of private property and contract law, and in a cultural setting in which shopkeepers, bankers, and factory owners are accorded at least as much respect as are generals, mandarins, and priests.  In other words, true progress occurred only when and only where the policies and procedures demanded by “Progressives” were rejected in favor of free minds and free markets.


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