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Happy Birthday, Adam Smith!

June 5, 2020

Adam Smith was born on this day in 1723.

Perhaps the strongest and most effective enemy of racism is the competitive free market.

Smith, an early and insightful student of markets, famously observed (in Wealth of Nations), "It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages."

That is, commerce is naturally blind to race, and bigotry in the marketplace is costly -- to the bigot.  Unlike decisions made by governments and partisans of all kinds, where some are favored and others are burdened depending on the preferences and whims of those in power, markets, unless disturbed by governments and subjected to coercion, are driven simply by transparent calculations of mutual advantage.

Political calculations are usually zero-sum matters;  one side wins, the other side loses.  Economic transactions are rarely zero-sum propositions;  in most commercial transactions each party seems himself as having received a benefit and made a profit.

It is no surprise, therefore, that Smith was an abolitionist and an opponent of bigotry.

Article Tags
Economy
Author
Joseph A. Morris is a Partner in the law firm of Morris & De La Rosa, with offices in Chicago and London. He maintains an active practice conducting trials and appeals in the areas of constitutional, business, labor and international law.
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