Economics

This escape from poverty originated in Western Europe in the eighteenth and nineteenth centuries with the coming of the Industrial Revolution and the freeing of men and markets from the heavy-handed regulations and commercial restrictions of government.

Adam Smith’s central contribution to economic understanding was surely his demonstration that under an institutional arrangement of individual liberty, property rights, and voluntary exchange the self-interested conduct of market participants could be shown to be consistent with a general betterment of the human condition.

In The Wealth of Nations, Adam Smith applied Francis Hutcheson’s idea of “natural liberty” in formulating a conception of the meaning of individual freedom and the role and functions of limited government in a free society.

Hume presented a devastating criticism of Mercantilist thinking on trade and commerce, while at the same time, demonstrating the self-regulating and “balancing” forces of the market process.

One of the most cherished misunderstandings, if not delusions, of the social engineer – the individual who would presume to attempt to remake society through conscious and planned design – is the confident belief that he (and those like him) can ever know enough to successfully remold mankind and human institutions.

Society was not created by design to provide safety and security, but, instead, freedom and rights emerged and evolved out of more primitive forms of tribal and collective association as responses to considered injustices and abusive power.

Adam Smith was one of Hutcheson’s students in Glasgow, and his influence on Adam Smith was singularly significant, from everything from the importance of division of labor and the role of private property, to the normative notion of a free society based on a “system of natural liberty.”

The “moral” that Mandeville drew from his tale was that prosperous, wealthy and great societies only arise from men’s self-interested desires, and that is what made for successful civilizations:

The best policy for government to follow is “laisser passer, laisser faire” — let goods pass and leave men alone to their own decisions.

Mercantilism developed in the emerging nation-states under the kings, especially, in France and Spain and in Great Britain, as a set of economic tools to assist in bringing about the centralization of political power and control.

The Catholic Church had a set of fundamental beliefs and principles that set it apart from the Greek and Roman views that had preceded it, and which were to have importance in the future in terms of their economic impact.

Political-Economic Ideas of The Greeks, Part 3

Austrian Economics is the most powerful explanation of why governments, no matter how well-intentioned, lack the knowledge, wisdom and ability to direct the lives of multitudes of people better than those people can do for themselves if left sufficiently at liberty to do so.