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… is from page 279 of my late Nobel-laureate colleague James Buchanan [2]’s 1976 paper “Public Goods and Natural Liberty,” which is chapter 9 in the 1976 collection The Market and the State: Essays in Honour of Adam Smith [3] (Thomas Wilson and Andrew S. Skinner, eds.) – a collection of original papers delivered at the University of Glasgow, in April 1976, on the bicentenary of the publication of Adam Smith’s magnificent An Inquiry Into the Nature and Causes of the Wealth of Nations [4]:
The restrictions on ‘natural liberty’ surely constitute ‘public bads’, from which it follows that their removal would be equivalent to the production of ‘public goods’. And surely these ‘public goods’ would increase the utility of persons in the community more than the sometimes piddling adjustments that are suggested for correcting minor market distortions. Smith would quickly discern that, now as then, markets ‘fail’ largely because they are not allowed to work because of overt political-governmental restrictions. It follows from this that the first steps toward making markets work more efficiently involve removing restrictions.
DBx: Adam Smith died at the age of 67 on this date, July 17th, in 1790.