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… is from page 9 of my late colleague Jim Buchanan [2]‘s 1971 paper “The Bases for Collective Action,” as this paper is reprinted in James M. Buchanan, Externalities and Public Expenditure Theory [3] (2001), which is volume 15 of The Collected Works of James M. Buchanan:
The genius of Adam Smith and other eighteenth-century philosophers lay in their recognition of this coordinating characteristic of the exchange process, and in their explicit analysis of the precise manner in which such an economy would work. Smith showed that such an economy, if only allowed to work freely, in contrast to the network of mercantilist controls that governments of Europe imposed on their economies in the sixteenth and seventeenth centuries, would increase the “Wealth of Nations.”
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