… is from page xxxvi of the 2003 Third Edition of economic historian Eric Jones’s 1981 book, The European Miracle:
Protection from one’s own ruler was second in importance only to defence against outside attack. ‘Peace and easy taxes’ is not an empty first approximation, and Adam Smith was not altogether bigoted when he saw them as preludes to business prosperity.
DBx: Yes.
It’s important, though, to be clear that Adam Smith cared about business prosperity only insofar as such prosperity contributes to the prosperity of the masses. Smith understood that the prosperity of the masses requires freedom of commerce; the prosperity of the masses requires the ability of businesses to compete freely for customers and to reap and retain the reward of profit if and when they successfully do so. But also – and crucially – those businesses that fail to satisfy consumers as well as do other businesses – domestic or foreign – must be allowed to suffer losses. Smith rejected the fallacy that business prosperity itself and as such is what defines the ‘wealth of nations.’
