Savitri Era of those who adore, Om Sri Aurobindo and The Mother.

Sunday, December 09, 2007

Adam Smith did not believe that the exercise of self interest ensured that social benefits would necessarily follow

Adam Smith did not recommend laissez faire economics, though he had many opportunities to do so. He doesn’t mention laissez faire (leave alone; or ‘laissez nous faire’, leave us alone', in its original format) in Wealth Of Nations, nor in anything else he wrote, including his correspondence.
That he is reputed to be a proponent of laissez faire is a fault of the people who started this assertion on no other basis than they had not read Wealth Of Nations through, confining their reading to selected quotations. If they had read Wealth Of Nations they would find items on the following list:
To the generally accepted roles for government, Smith added others of a more controversial nature. For some, it is an issue of fundamental principle; for others it is a boundary dispute...
In short, Adam Smith was more concerned with what worked in a commercial society than he was with abstract principles. He did not believe that the exercise of self interest ensured that social benefits would necessarily follow and he gave 50 instances in Books I and II of the malign outcomes of self interest from ‘merchants and manufacturers’, ‘rulers of mankind’, ‘legislators’ and people who influence them, ‘sovereigns’, and ‘employees of monopolists’. On historical precedent, the situation was not likely to change quickly. In fact it still hasn’t and, if anything, in many aspects it has got worse.

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