… was quite a year. In this essay for the Independent Institute I applaud the words of Thomas Jefferson and of Adam Smith. A slice:
It’s often said that America’s founders had “faith” in freedom. But because of Smith’s work, a better term is confidence in freedom. Smith explained how private property rights, freedom of contract, economic competition, and market prices peacefully direct each individual who is pursuing his own goals to achieve those goals only by helping countless other individuals to achieve their goals. The result is a beautiful process of mutual assistance.
In one of Smith’s most quoted passages, he observed that “It is not from the benevolence of the butcher, the brewer, or the baker, that we can expect our dinner, but from their regard to their own interest.” Businesses in free markets prosper only by satisfying consumers – and the more that businesses satisfy consumers, the more those businesses, their workers, and their customers will prosper.
And while Smith was a realist who knew that markets always work imperfectly, he argued that in most cases government intervention makes matters worse. Even if politicians were miraculously to become immune to pressure from special-interest groups, their knowledge of how best to use scarce resources is far too scant to enable them, or the bureaucrats whom they employ, to improve upon market outcomes.
In 2020, alas, this deep wisdom from 1776 is largely lost. Politicians and pundits today, from left to right, see ordinary men and women as hapless victims of forces beyond their control. These pathetic creatures, it is assumed, need not protection of their rights but, instead, provision of their sustenance.
