Adam Smith Supported Using Markets to Serve Society Not Robber Barrons

The Beast Unchained: Privatizing Up, Down, and Inside

If we cede our minds "in here" to the beasts of private enterprise, they will hold the keys to our global mind, and it will be to them that we will have to turn when the challenges before us demand that we apply our minds "in here" most keenly.

The fanciful idea behind unfettered free markets and private enterprise — Adam Smith's "invisible hand" — is the law of the jungle, in which we imagine that we can ride on the back of perfect predators, unchained from public regulation and common purpose.

Adam Smith did have great ideas on economics. However, those quoting him now often do him grave injustice. Including those that think he argued for an unregulated market. He was first a moral philosopher who looked at emerging capitalism to document how it markets work and detail that direct intervention was often not the ideal solution. Basically taking a systemic view that markets can react better at meeting some societal needs than individuals making decision.

Adam Smith completely understood businesses would seek unfair advantage in the market. For capitalism to work the market must be regulated. In addition, the externalities (pollution, risks…) are failing in the market – and must somehow be addressed for markets to work.

Adam Smith did not believe free markets were the end (the aim). He believed the greatest good to society would come when the market was allowed to operate efficiently but that those players in the market would attempt to subvert societal good for their own good and that needed to be managed.

We should not allow those seeking to take from society what they don't deserve to claim such immoral behavior (that Adam Smith saw as wrong) to claim support from Adam Smith for their desires.

Related: Monopolies and Oligopolies do not a Free Market Make - What Capitalism Is, And Is Not - There is No Invisible Hand