Supporters of free-market capitalism are facing challenging times as Keynesians, Marxists, and welfare-state advocates call for government intervention in the name of equality and environmental protection. A Fraser Institute poll found that 43% of those under 35 believe that socialism is the best system, versus 40% who disagree. However, it is all the more reason to celebrate the 300th anniversary of Adam Smith’s birth on June 16. In 1776, Smith published The Wealth of Nations, which laid the intellectual foundation of capitalism, free markets, and individual choice. This foundation has helped the US and many other nations achieve prosperity, marked by the creation of a vibrant middle class and full political freedoms.
Since the decline of Communism, there has been a reduction in poverty that is unparalleled in human history. Smith’s thesis, which still resonates today, is that setting people free to pursue their own self-interest produces a collective result far superior to what you get when you try to impose regulatory straitjackets. Free people allowed to make free choices in free markets will satisfy their needs (and society’s) far better than any government can. Smith was also the first great exponent of free trade, believing that allowing people and countries to specialize and trade freely would produce enormous wealth.
Despite accusations of ignoring the poor and unfortunate in his explanation of how an economy works, The Wealth of Nations discussed how people are driven by self-interest to maximize their own advantages but also how they are compelled by the experience of living in a free society to be empathetic and considerate of the feelings of their family members, friends, and neighbors. As we celebrate Smith’s gift to the world, it is important to acknowledge the many attacks against him and attempts to undermine his ideas. However, Smith himself was an optimist when it came to human progress, believing that the effort of every person to better their condition could maintain the natural progress of things toward improvement, in spite of government extravagance and errors in administration.
