Running head: HOW WOULD ADAM SMITH RESPOND?
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How Would Adam Smith Respond to Modern-Day Claims That Unequal Distribution of Wealth
Leads to Social Unrest?
Brittany Sharma
Liberty University
HOW WOULD ADAM SMITH RESPOND?
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How Would Adam Smith Respond to Modern-Day Claims That Unequal Distribution of Wealth
Leads to Social Unrest?
Adam Smith was a classical economist, best known as the author of his book, An Inquiry
into the Nature and causes of the Wealth of Nations, which is considered to be one of the most
influential books ever written. He was a strong advocate for workers and the poor and strongly
believed that all people have rights to freedom and wealth. For this reason, I believe that he
would agree with modern-day claims that unequal distribution of wealth leads to social unrest. In
this essay, I will discuss a few of Adam Smith’s economic theories to support why I believe he
would respond favorably to this claim.
In Adam Smith’s The Wealth of Nations, the economist states, “There is no art which one
government sooner learns of another than that of draining money from the pockets of the people”
(Adam Smith, Edwin Cannan, & George Stigler, 2012, p. 861). Adam Smith realized the
importance of government, but he also believed that the government could not be completely
trusted and, therefore, should have limited control of everything within a nation, including the
economy. Author Thomas Sowell explains in our textbook that Smith conceived government
intervention in the economy as, “…intervention on behalf of the wealthy and powerful” (Thomas
Sowell, 2007, p. 14). Smith saw the government as a group of very wealthy politicians whom
sought to do anything in their power to get richer, even if it meant taking money out of the
pockets of those who were less fortunate. Author Dennis Rasmussen explains in his article,
Adam Smith on What is Wrong With Economic Inequality, that Smith’s biggest concern was that
extreme economic inequality altered our sympathies and lead us to model ourselves after the rich
and look down on the poor, (Rasmussen, 2016, p. 342). He recognized the importance of equality
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and believed that all people should have a good standard of living, which he believed would
benefit not only the individual, but also society as a whole.
As a classical economist, Adam Smith was also an avid supporter of a free market
system, which is a system that comprises of free exchanges of goods and services without any
barriers. Author Lisa Herzog states in her article, Adam Smith on Markets and Justice, “A central
element of Smith's defense of markets was that he expected them to have distributive results he
endorsed: a long-term tendency towards more equality and an equal opportunity for individuals,
especially those from the lower strata of society, to acquire a decent standard of living by
offering good products and services to their customers” (Herzog, 2014). As I mentioned in the
previous paragraph, Smith was very concerned with equality for all individuals and believed
everyone should have a decent standard of living. He wanted to establish a market that would
allow individuals to exchange goods and services freely, without constraint, as long as each
individual did not violate any laws. This type of system, he believed, would benefit society
because individuals would be interacting with one another and making economic decisions that
would be best for all the individuals involved, rather than letting the government control these
decisions for them.
Adam Smith also expressed his support for international trade because of the benefits it
provides for all nations involved. In Reinhard Schumacher’s article, Adam Smith’s “Two Distinct
Benefits” from Trade: The Dead End of “Vent for Surplus” Interpretations, the author discusses
that Smith’s export and import theory benefits a nation by increasing its wealth, “which Smith
defines as ‘the annual produce of the land and labor of the society’” (Schumacher, 2015, p.587).
Smith strongly believed in the importance of foreign trade for the wealth and prosperity of
nations, which in turn would benefit all of society. Schumacher also states in his article that
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Smith argues, “An economically progressing society needs a positive balance of the annual
produce and consumption” (Schumacher, 2015, p. 588). Trading internationally not only helps in
achieving this balance, but it also increases a nation’s capital, which brings wealth and prosperity
to a nation’s society.
Lastly, Adam Smith was known to be charitable and an advocate for human rights. Much
of his book, The Theory of Moral Sentiments, discusses ideas revolving around morality and
human sympathy. In this book he states, “How selfish so ever man may be supposed, there are
evidently some principles in his nature, which interest him in the fortune of others, and render
their happiness necessary to him, though he derives nothing from it, except the pleasure of seeing
it” (Adam Smith & Hort Recktenwald, 1986, p. 9). He also states in this book, “If [justice] is
removed, the great, the immense fabric of human society, that fabric which to raise and support
seems in this world if I may say so has the peculiar and darling care of Nature, must in a moment
crumble into atoms” (Adam Smith & Hort Recktenwald, 1986, p. 86). Although his ideas have
often been thought of as ideas of self-interest, rather than the interests of others, he explains in
this book that he believes every human being is happiest when they are able to help others who
may not be as fortunate as they are. He himself was believed to have given a large sum of his
earnings to charities because he believed in the spreading of wealth to those who were less
fortunate so that they may have a good living standard and to be considered equal in society.
In conclusion, I believe that Adam Smith would respond favorably to the modern-day
claims that unequal distribution of wealth leads to social unrest. His many theories, such as
limited government control, an establishment of a free market, support of international trading,
and his strong advocacy of charity and human rights all give strong support and evidence that
Adam Smith would agree with unequal distribution of wealth as being detrimental to a nation’s
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society. His main concern as a classical economist was the equality, as well as a good standard of
living, for all individuals.
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References
Herzog, L. (2014). Adam Smith on Markets and Justice. Philosophy Compass, 9(12), 864-875.
Retrieved from
http://onlinelibrary.wiley.com.ezproxy.liberty.edu/wol1/doi/10.1111/phc3.12183/full
RASMUSSEN, D. C. (2016). Adam smith on what is wrong with economic inequality. The
American Political Science Review, 110(2), 342-352. Retrieved from
http://dx.doi.org.ezproxy.liberty.edu/10.1017/S00030554160
Schumacher, R. (2015). Adam Smith's 'Two Distinct Benefits' from Trade: The Dead End of
'Vent-for-Surplus' Interpretations. History Of Political Economy, 47(4), 577-603.
Retrieved from http://ezproxy.liberty.edu/login?
url=http://search.ebscohost.com/login.aspx?
direct=true&db=eoh&AN=1552811&site=ehost-live&scope=site
Smith, A., & Recktenwald, H. C. (1986). The theory of moral sentiments. Du
sseldorf u.a.: Verl.
Wirtschaft u. Finanzen.
Smith, A., Cannan, E., & Stigler, G. J. (2012). An inquiry into the nature and causes of the
wealth of nations: two volumes in one. Chicago: University of Chicago Press.
Sowell, T. (2007). On classical economics. New Haven, CT: Yale University Press.
