The publication of the Declaration of Independence on July 4, 1776 was undoubtedly a seminal statement of the beliefs of a then fledgling country. Another defining publication was printed five months earlier. While hardly as well known as the Declaration of Independence, it also capitalizes on the spirit of that time by delineating the governmental and economic truths upon which this country is built. “The Wealth of Nations” by Scottish moral philosopher Adam Smith spelled out the characteristics of a stable and free economy which he believed could be severely hampered by private and governmental entities of his day.
Like the Declaration of Independence, “The Wealth of Nations” riled against the English king and his government for its disregard of individual citizens’ economic rights. The real villain was the English Mercantile system, whereby colonies existed solely for the purpose of producing the raw materials which were then shipped to the mother country for manufacturing, and later purchased by the colonists. Such a system, Smith surmised, lessened economic growth in America and England by inhibiting productivity, or as Smith called it, man’s “propensity to truck and barter.” By so doing, the government was stifling the ability of individuals and businesses to create wealth for themselves and their countries.
Smith realized that government alone was not solely responsible for inhibiting the wealth of a nation. Groups of manufacturers could also be at fault. He stated, “Men of the same trade seldom meet together that the talk does not turn to a conspiracy against the public.” The result of such conspiracies were inevitably higher prices for consumers and slower growth for the economy as a whole. Smith pointed out many specific instances where, directly or indirectly, government was sanctioning the restraint of trade. He pointed to government sanctioned monopolies of the time, such as the British East Indies Trading Company, and the various laws which stifled the growth of wealth-creating business in Great Britain and in its colonies. The result was a lessening of an individual’s ability to create their own wealth and that of their nation.
Many see Smith’s advocacy for what we have come to call “free enterprise,” as only a blatant defense of a total laissez-faire approach to business by government. Such is not the case. In the first place, Smith believed that for an economy and a country to be successful that government must play three important roles: protecting citizenry from external threats, i.e., providing an army and navy; enforcing justice and property rights through a legal system; and providing for public goods which the private sector cannot efficiently manage. These were essential roles for our new nation’s government in 1776 and remain so today.
“The Wealth of Nations” can best be understood within the context of Smith’s earlier work, “The Theory of Moral Sentiments,” published in 1759. Here Smith delineates the principles that mature and caring societies should possess and enforce. In “Moral Sentiments” Smith suggests that empathy is a key characteristic of humans. It allows the individual the ability to imagine oneself in another’s situation leading to feelings of compassion or moral sentiments for those less fortunate. Smith believed that institutions including government should build upon citizens’ inherent empathy for those less fortunate. This he believed, along with peoples’ “search for mutual approval to drive moral judgements, virtue and self-control” would provide for the necessary institutions that will guarantee optimal happiness for all.
One can see Smith’s assertions playing out in much of the Founding Father’s thinking. That is because to a greater or lesser degree, Smith and the Founding Fathers were all influenced by the Scottish Enlightenment of the 18th and 19th century. Their beliefs emphasized “creating the greatest happiness” for all by allowing people to pursue their own interests unincumbered by restrictive actions and policies imposed by special interests or overbearing government policies.
The “The Wealth of Nations” is 900 pages long. I don’t suggest you read it. Instead, in this our 250 years as a country, it might be helpful to re-read the 1,337 words of the Declaration of Independence and reflect upon the principles of liberty and economic freedom in which our Founding Fathers so strongly believed and worked to assure that those principles remain intact.
Michael A. MacDowell is President Emeritus of Misericordia University and serves at a Trustee of the Calvin K. Kazanjian Foundation, Inc. He lives in Estero.
This article originally appeared on Fort Myers News-Press: The other important 1776 publication | Opinion
Reporting by Michael A. MacDowell / Fort Myers News-Press
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