Quotation of the Day…

by Don Boudreaux on December 22, 2020

in Adam Smith, Seen and Unseen, Trade

… is from page 512 of the 1982 Liberty Fund issue of the 1978 Oxford University Press edition of Adam Smith’s Lectures on Jurisprudence:

By hindering people to dispose of their money as they think proper, you discourage these manufacturers by which this money is gained.

DBx: This insight by Smith is deep.

Workers’ real incomes – the amount of satisfaction that they are able to derive for themselves from spending the fruits of their earnings – are reduced by restrictions on their freedom to spend their incomes (as Smith says) “as they think proper.” And because such restrictions on freedom to spend reduce the real returns to laboring and other productive effort, the incentives to work hard and produce creatively are dampened.


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