Adam Smith’s America: How a Scottish Philosopher Became an Icon of American Capitalism

Following Smith, Adams was convinced that men valued wealth not for its intrinsic value, but rather for its instrumental value in earning social recognition and distinction. “The answer to all these questions is,” Adams asserted, “because riches attract the attention, consideration, and congratulations of mankind.”

Government operated through coercion, clumsiness, and deceptive intention; the invisible hand of the market, however, was the realm of freedom, choice, and possibility.

What appears to be one of the central, orienting questions for reading Smith in the twenty-first century is a new version of the old Adam Smith Problem: how do we reconcile Smith’s advocacy of the material benefits of the market society he envisioned with his worries about its heavy moral costs?

Adams feared that the goods of fortune would determine who had power—not just in terms of the formal structures of law and government, but in terms of people’s ability to “stand out, to be recognized, and to evoke favorable public sentiments.”161 In such a society, wondered Adams, “what chance has humble, modest, obscure, and poor merit in such a s

Especially in the northeastern clerical schools, then, the science of political economy qua moral philosophy was a handmaiden of religion; the study of the systematic arrangement of the laws of nature—even the laws that governed economic activity—revealed the divine will of God and instructed one’s highest moral faculty to follow its dictates.

Though Hayek’s readings of Smith may have been opportunistic, they were not inaccurate.24 He was careful to distance his interpretation of Smith from those he found to be reductive or dogmatic. His interest in Smith’s works and their prominence stemmed, above all, from his impulse to lay the epistemic foundations for a social theory of markets and

Scholars have long noticed Smith’s worries about the debilitating effects of the division of labor and anxieties attached to the insatiable desire “better one’s condition.”

For Friedman, Smith’s invisible hand was an “instrumental device” whose direct opposite was government.

“Oeconomy in general is the art of providing for all the wants of a family, with prudence and frugality,” Steuart asserted in the first chapter of the work. “What oeconomy is in a family, political economy is in a state … The great art therefore of political economy is, first to adapt the different operations of it to the spirit, manners, habits, a