Adam Smith as political caricature

One of my pet peeves is conservatives and libertarians who claim to adore liberal philosopher Adam Smith (1723-1790), so reveal a complete failure to understand his writings. New York Times journalist David Leonhardt expresses the same complaint.

He believed that government had a crucial role to play in a well-functioning economy. It should finance and run good schools, as well as build roads, bridges and parks, he argued. It should tax alcohol, sugar and tobacco, all of which impose costs on society. It should regulate businesses to protect workers. And it should tax the rich — who suffer from “indolence and vanity” — to help the poor.

Which leftist economist was this? None other than Adam Smith, the inventor of the “invisible hand” and the icon of laissez-faire economics today. Smith’s modern reputation is a caricature. …. He certainly believed that a market economy was a powerful force for good. …. Yet he did not have a religious faith in the market. Smith was a classical liberal, in the European sense of the word, who emphasized the essential equality among human beings.

David Leonhardt, “‘Chicagonomics’ and ‘Economics Rules’“, New York Times Sunday Book Review, 22 November 2015 (metered paywall).

David Leonhardt is reviewing Chicagonomics: The Evolution of Chicago Free Market Economics by Lanny Ebenstein (St Martin’s Press, 2015), and Economics Rules: The Rights and Wrongs of the Dismal Science, by Dani Rodrik (Norton, 2015).

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