The Politics of Wealth
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‘All for ourselves, and nothing for other people, seems, in every age of the world, to have been the vile maxim of the masters of mankind.’ (WN III.iv.10, p. 418)
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‘The uniform, constant, and uninterrupted effort of every man to better his condition, the principle from which publick and national, as well as private opulence is originally derived, is frequently powerful enough to maintain the natural progress of things towards improvement, in spite both of the extravagance of government, and of the greatest errors of administration’. (WN II.iii.31, p. 343)
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‘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’ (WN IV. ix .51, p. 687)
Central to Smith’s work is what we might call a ‘politics of wealth’ – how political power, national policy, and historical institutions shape the distribution and growth of economic and social resources. In Book III, Smith suggests that Europe’s economic development was distorted by feudal landholding and by the political power of landlords, whose monopolization of land slowed the growth of commerce and industry.
This is extended in the following book where Smith turns his critique to empire and the mercantile system, arguing against imperial policy for treating colonies as instruments for the enrichment of the metropole. Here Smith argues that policies that support monopolies, such as around the exclusivity of colonial trade and the commercial dominance of trading companies serve to benefit a very small group of merchants while oppressing those less powerful, from British workers to people in the colonies. At the same time, he argued, these policies imposed heavy military and administrative costs on British society.
In Book V, Smith extends this political critique by showing how the fiscal burdens of imperialism, including wars fought to protect monopolistic trade, are ultimately paid by the public rather than the private interests who profit from them.
