Smith’s foresight into the potential for increasing standards of living, egalitarian in nature, before the Industrial Revolution took hold is remarkable, then and now. His understanding of what we now call economics relies on personalism; the human being is conscious, social, and purposeful and is the locus of analysis. We are inherently social rather than atomistic individuals and must habituate virtue over time, which begins in the family and extends to our community and commercial relationships. Adam Smith provides a cohesive framework for what we now call the economic way of thinking.
When mainstream economic education discards Smith, we are left with growing scientism, which yields economic hubris. Smith had a capability for wonder that encourages the humility necessary to avoid scientism. Smith also engaged in comparative institutional analysis, which is some of the most valuable work in economics today. It’s easy to see Smith’s influence on Mises’s and Hayek’s contributions to the socialist calculation debate and economist Richard Wagner’s work on entangled political economy, just to give two examples. Smith is one of the intellectual giants on whose shoulders we stand today.
Smith has influenced my teaching in economics. I have the great pleasure of teaching students from around the country at The Fund for American Studies at George Mason University in courses such as comparative economic systems and international economics. I also teach economics for foreign policy-makers at the Institute for World Politics. Whether I am teaching undergraduate or graduate students, we always begin with human nature and Adam Smith. We can’t start with trade deficits or even demand curves before we understand what we are trying to do as economists. Economics is the study of how humans make decisions under conditions of scarcity and uncertainty. Even on our best day, we never have the complete knowledge necessary to make the best decisions.
While the Democratic Party has never met a problem it doesn’t want to address with federal intervention, the GOP correctly sees government’s role as limited. It’s disconcerting then to see members of Ronald Reagan’s party join the left’s ranks, cheering as a more muscular Washington settles scores against U.S. businesses. This is doubtless a welcome shift for competitors looking to sic regulators on their rivals, but it’s bad news for the millions of Americans who are stuck with a diminished standard of living.
The consumer’s will is increasingly being trampled by steps such as the antitrust lawsuits the federal government and state attorneys general have brought against tech companies. Consider the Justice Department’s suit against Google and the Federal Trade Commission’s suit against Amazon. Both cases allege the companies have maintained unlawful monopoly power over their peers. Yet both cases are built on complaints from competitors—not consumers—who lost fair and square and are now crying foul to government referees.
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It isn’t the government’s business to pick winners and losers and dictate consumer choices.
Also critical of today’s mad fever for antitrust enforcement is Gary Galles.
Matthew Continetti remembers Frank Meyer. A slice:
Meyer’s most controversial proposition was that freedom ought to be the goal of politics, and virtue the goal of ethics. True virtue, he went on, was uncoerced, and a government that tried to impose virtue on the people would fail. His reasoning drew a rebuke from his good friend L. Brent Bozell Jr., another National Review founder, whose own ideological development carried him into traditionalist Catholicism. Bozell may have given fusionism its name, but the decades-long focus on his quarrel with Meyer over the nature of morality distracts from Meyer’s larger accomplishment. Fusionism might not always work in theory. It does work in practice.
To a certain kind of reformer, prices simply appear as arbitrary obstacles, interfering with the achievement of some desirable goal. Lacking an appreciation of prices as conveyers of information about an underlying reality, they see changing the price as all that’s needed to “fix” some perceived social problem. When the perceived social problem is the high price of housing, these reformers don’t think about what underlying factors might be creating these high prices (aside from vaguely gesturing at “greed”), and because of that, they don’t see the solution as policy changes that might increase the housing supply. Instead, in their mind, all that’s needed to fix the problem is to implement price ceilings like rent control. There are no further factors to consider, or deeper lessons to be learned.
Megan McArdle writes wisely about freedom of speech. A slice:
But free speech is the cornerstone of our democracy, and free speech by definition requires protecting unpopular ideas. Since bad ideas are often unpopular, this will include protecting some bad ones — fighting them with good ideas, rather than threats.
