Smith, Marx and Ricardo are giants of economic theory. Here, economics professor Linda Yueh imagines what advice they'd give us todayby Linda Yueh / April 13, 2018 / Leave a comment
Published in May 2018 issue of Prospect Magazine
Adam Smith: build a smart state
Smith’s writing famously urged a limited role for government—but he should not be caricatured of as believing in pure laissez-faire. He argued that the state should step in where markets don’t work. It should, for example, maintain good transport facilities, as that would break monopolies and encourage competition. He also thought government should provide universal education. So, it isn’t impossible to imagine a modern-day Smith decrying excessive educational fees and a poorly-run privatised railway system.
A truly Smithian state would intervene whenever it will improve competition, and particularly the quality of the society in which we live. Smith was, after all, a professor of moral philosophy as well as an economist. Our own times are incomparably more abundant than his, and perhaps the single lesson he would most press on economics today is to remember that it is the quality and not just the quantity of economic growth that matters.