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

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?

In a similar vein, the egalitarian philosopher Elizabeth Anderson has argued that, for Smith, the “leading virtues of market society” were not growth and efficiency, but rather freedom from relationships of private domination and dependence.

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.

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

Stigler’s mark in economics centered on the economic competency—or rather incompetency—of state power. Once man’s behavior was reduced to utility-maximizing self-interest, economists were able to tear down the edifices of government intervention in the economy; they sought “a large role for explicit or implicit prices in the solution of many social

Perhaps the greatest consequence of the Chicago Smith was the way it served to reframe the problems of modern American capitalism and modern society as problems that stemmed from government, rather than the market itself.

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

Knight wanted to question not just the ethical bases of a competitive economic order, but also the ethical norms that a market society fostered. “An examination of the ethics of the economic system must consider the question of the kind of wants which it tends to generate or nourish as well as its treatment of wants as they exist at any given time,