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Bonus Quotation of the Day…

… is from page 16 of Thomas Sowell’s 1979 paper “Adam Smith in Theory and Practice,” which is Chapter 1 in Adam Smith and Modern Political Economy, (Gerald P. O’Driscoll, Jr., ed., 1979) (page references deleted; original emphasis; the internal quotations are from The Wealth of Nations):

[Adam] Smith had a low opinion of the honesty and integrity of businessmen, but they at least were forced to compete with one another. it is competition that forces businessmen to have “good management … for the sake of self-defense.” A government by definition is a monopoly in certain functions. Extending that monopoly to economic agents, such as businessmen, under the protection of the government’s monopoly was doubly dangerous. The “spirit of monopoly” was high in businessmen who were adept at “sophistry” to justify government protection of their interests. The protectionist doctrine of businessmen “confounded the common sense of mankind” and those who taught this doctrine “were by no means such fools as they who believed it.”

DBx: Yes.

I’ve only one very tiny nit to pick with Sowell’s interpretation of Smith. Smith did indeed issue much criticism of business people, but nearly all of Smith’s mention of business people is of them seeking special privileges from the state. Smith quite rightly was appalled at the lack of ethics and decency of anyone who asks the state to obstruct others’ economic opportunities. And Smith’s disgust of such people was only deeper when these special-privilege-seeking producers attempted to pass off their motives as pure and public-spirited.