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Teaching in the Spirit of Liberty - Resource Round Up!

system of natural liberty teach adam smith virtual reading group read the wealth of nations free markets

July 14, 2022


Did you miss AdamSmithWorks most recent virtual reading group, “Teaching in the Spirit of Liberty”? Not to worry, we’re going to share the highlights with you here. 
Teachers can get so busy teaching the operations of economics to their students, that it’s easy to forget about the central messages and ideas that animate those operations. Alice Temnick put together some resources to remind us about the big ideas. 
The readings for the group were short and familiar to many, but worth revisiting. 

The Readings
Wealth of Nations IV.ix  on Natural Liberty (toward the end of the section)
 These brief pages cover a lot! Smith is highly quotable (as we might expect from a lecturer of rhetoric!) but these pages are particularly rich. We discussed, “The greatest and most important branch of the commerce of every nation, it has already been observed, is that which is carried on between the inhabitants of the town and those of the country,” and “The proper performance of those several duties of the sovereign necessarily supposes a certain expence; and this expence again necessarily requires a certain revenue to support it,” but mostly we centered here: 
All systems either of preference or of restraint, therefore, being thus completely taken away, the obvious and simple system of natural liberty establishes itself of its own accord. Every man, as long as he does not violate the laws of justice, is left perfectly free to pursue his own interest his own way, and to bring both his industry and capital into competition with those of any other man, or order of men. The sovereign is completely discharged from a duty, in the attempting to perform which he must always be exposed to innumerable delusions, and for the proper performance of which no human wisdom or knowledge could ever be sufficient; the duty of superintending the industry of private people, and of directing it towards the employments most suitable to the interest of the society. According to the system of natural liberty, the sovereign has only three duties to attend to; three duties of great importance, indeed, but plain and intelligible to common understandings: first, the duty of protecting the society from violence and invasion of other independent societies; secondly, the duty of protecting, as far as possible, every member of the society from the injustice or oppression of every other member of it, or the duty of establishing an exact administration of justice; and, thirdly, the duty of erecting and maintaining certain public works and certain public institutions which it can never be for the interest of any individual, or small number of individuals, to erect and maintain; because the profit could never repay the expence to any individual or small number of individuals, though it may frequently do much more than repay it to a great society.

A lot happened in this paragraph: defining a system of natural liberty, pointing out the hubris and folly of too controlling sovereigns, and the outline of what governments should do. Many participants enjoy the connection between Smith’s “delusional” sovereign and what F. A. Hayek many years later focused on in, The Use of Knowledge in Society (one of the other readings). 

Hayek’s piece is longer than the Smith and hard to read in a different way but worth the trouble. The third paragraph hits hard in a Smithian way: 
The peculiar character of the problem of a rational economic order is determined precisely by the fact that the knowledge of the circumstances of which we must make use never exists in concentrated or integrated form but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess. The economic problem of society is thus not merely a problem of how to allocate “given” resources—if “given” is taken to mean given to a single mind which deliberately solves the problem set by these “data.” It is rather a problem of how to secure the best use of resources known to any of the members of society, for ends whose relative importance only these individuals know. Or, to put it briefly, it is a problem of the utilization of knowledge which is not given to anyone in its totality.

Remember, Adam Smith was writing in 1776 and F. A. Hayek in 1945. The last official reading is MUCH more recent and of a different kind: James Otteson, Markets Natural and Artificial in Adam Smith, in Cosmos and Taxis.
James Otteson is a familiar name at Adam Smith Works but this was an article of his I hadn’t read before. In this note, Ottseon is offering a pointed critique of a claim made in a book about Adam Smith, Jesse Norman’s Adam Smith: Father of Economics. Norman’s book came out in 2018 and Ottson’s piece is published in 2020. Otteson zero’s in on one claim from Norman and pushes back. Norman thinks that Smith would endorse a wider scope of regulations than Otteson believes. While Smith is clear that taxes are needed (and has outlined the three duties of sovereigns that taxes should support!), things like corporate privileges, required apprenticeships, and other restrictions on laborers are criticized by Smith. Otteson quotes from The Wealth of Nations in his reply to Norman. 
Let the same natural liberty of exercising what species of industry they please be restored to all his majesty’s subjects, in the same manner as to soldiers and seamen; that is, break down the exclusive privileges of corporations, and repeal the statute of apprenticeship, both which are real encroachments upon natural liberty, and add to these the repeal of the law of settlements, so that a poor workman, when thrown out of employment either in one trade or in one place, may seek for it in another trade or in another place.

And, of course, one of the BEST parts about the virtual reading groups is the chat. We don’t share that but I can share a list of the links and ideas that were mentioned as well as a few that occurred to me after the session was over. 

The Resources
The BIG ONE! Adam Smith Works Educator Resources: https://www.adamsmithworks.org/educational_resources

James Otteson goodness

Thinking outside the text book

Readings galore! 
It would NOT be a Liberty Fund reading group if you didn’t walk about with more to read after and this group was no exception. Add these to your open tabs, night stands, and wish lists.

FOMO? 
Comments
Deborah Snyder

Hello! lt just so happened l missed this session; l pretegistered but couldn't find the link still learning about phone. Then Shelly sent me a reply; she was helpful and very nice. All to say now l can not only reread the material but chat; see you soon😊