Publication Date

1-1-2025

Document Type

Article

Publication Title

Journal of Private Enterprise

Volume

40

Issue

3

First Page

1

Last Page

19

Abstract

Commentators on Adam Smith’s Inquiry into the Nature and Causes of the Wealth of Nations often characterize Smith as a proponent of government in multiple areas, including security in person, property, contract, and some public goods. However, Smith understood government more expansively than people today. In volume I, book III, chapters I–IV, Smith describes the evolution of merchant towns in England that led to “good governance” that dismantled the feudal system. This limited government not only included the security provided by the formal laws and institutions. It also aligned the informal elements of individual civic ethics and self-reliance with the formal institutions. This Smithian combination of formal and informal government encouraged liberty and market exchange, which enriched towns and, then, agriculture. It established the foundation for English economic development, which made the nation wealthy.

Keywords

Adam Smith, economic growth, government, liberty, market exchange, merchant towns, Wealth of Nations

Creative Commons License

Creative Commons License
This work is licensed under a Creative Commons Attribution-Noncommercial 3.0 License

Department

Economics

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