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The Credit Crunch

Don’t Blame Adam Smith

Toni Vogel Carey says Smith never wanted the free market to be freely corrupt.

Modern market economics was born in Scotland in 1776, with Adam Smith’s Inquiry into the Nature and Causes of the Wealth of Nations. In 1876 the editor-in-chief of The Economist Walter Bagehot declared that “its teachings have settled down into the common-sense of the [British] nation, and have become irreversible.”

Smith’s political economics has had its detractors, of course. In Bagehot’s time it was tainted by Social Darwinism, the position – held neither by Darwin nor by Smith, but by Herbert Spencer – that biological survival of the fittest explains and justifies business competition red in tooth and claw. Strong challenges came from both Marxist and Soviet communism.

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