The Stanford Encyclopedia of Philosophy has an excellent new entry up by Samuel Fleishacker on “Adam Smith’s Moral and Political Philosophy.” The whole thing is worth reading, including the extremely helpful summary of Smith’s complicated moral theory as developed in his Theory of Moral Sentiments.
But for most readers of this blog, it is the fifth section on Smith’s political philosophy that will be of primary interest. Fleishacker describes Smith as an advocate of a relatively minimal state, and notes some areas of overlap and contrast with more contemporary libertarian thought:
The practical point of his treatise on economics was to urge this restrained, modest approach to economic intervention on governing officials. Smith did not favor as hands-off an approach as some of his self-proclaimed followers do today—he believed that states could and should re-distribute wealth to some degree, and defend the poor and disadvantaged against those who wield power over them in the private sector (see Fleischacker 2004, § 57)—but he certainly wanted the state to end all policies, common in his mercantilist day, designed to favor industry over agriculture, or some industries over others. Smith believed strongly in the importance of local knowledge to economic decision-making, and consequently thought that business should be left to businesspeople, who understand the particular situations in which they work far better than any government official (on this Hayek understood Smith well: see Hayek 1978 and C. Smith 2013). By the same token, governance should be kept out of the hands of businesspeople, since they are likely to use it to promote their particular interests, and not be concerned for the well-being of the citizenry as a whole: Smith’s opposition to the East India Company is based on this principle (see Muthu 2008).
Of course, the fact that Smith advocated some redistribution and defense of the poor and disadvantaged doesn’t distinguish Smith from those who are probably best thought of as his followers. Both Friedrich Hayek and Milton Friedman advocated similar policies. And while Nozick and Rothbard didn’t, I don’t consider either of these figures to be best thought of as working in the Smithian tradition of moral and political philosophy. Especially Rothbard.
Smith’s political thought does, however, have a lot in common with the kind of libertarianism endorsed by most of us here at BHL. Consider, for instance, Fleishacker’s summary of the way in which Smith’s view of the poor constituted a major shift in political thought:
Until the late eighteenth century, most writers on the role of government vis-à-vis the poor maintained that governments should keep the poor in poverty, so that they show proper respect to their superiors and not waste money on drink. Smith had more influence than anyone else in changing this attitude—he was one of the earliest and most fervent champions of the rights and virtues of the poor, arguing against wage caps and other constraints that kept the poor from rising socially and economically
So, given that Smith was such a champion of the poor, why did he favor a limited government? Why not have the government do more to help the poor? Fleishacker’s essay contains a lengthy discussion of Smith’s answer to this question, and again, the whole thing is worth reading. But, in sum:
The first answer to that is that Smith did not think government officials were competent to handle much beside the needs of defense and the administration of justice…..In addition, Smith holds that social sanctions can do a better job at many tasks that other thinkers expected of political sanctions….Finally, Smith limits the activities of governments because he considers it crucial to the development of virtue that people have plenty of room to act, and shape their feelings, on their own…Indeed, for Smith, governments can best encourage virtue precisely by refraining from encouraging virtue.
Fleishacker doesn’t make use of the distinction between libertarianism and classical liberalism, instead concluding his section on Smith’s political philosophy by simply noting that Smith doesn’t look much like a contemporary libertarian. And if you identify libertarianism with the strict natural-rights view of Nozick and Rothbard, than I suppose that’s correct. But I think it’s useful to talk about libertarianism in a broader sense, one which encompasses not just the minimal statism of Nozick and Rand but also the somewhat more expansive views of Hayek and Friedman (Milton), and also the less expansive views of Rothbard and Friedman (David). If one classifies thinkers according to their political outputs, rather than their underlying moral inputs, then it makes good sense to classify all all of these people as libertarians. Their commitment to the combination of spontaneous order, strong property rights, individualism, and skepticism of power sets them enough apart from the rest of the political landscape, and gives them enough in common, to justify a common label, at least for some purposes.
When we’re gatherer together amongst ourselves at our own conventions, then we can focus on our differences and split ourselves into progressively smaller ideological sub-factions. But for purposes of the broader political conversation, we are all of us, Adam Smith included, libertarians.