Editing Adam Smith (section)

==Legacy==

===In economics and moral philosophy===
''The Wealth of Nations'' was a precursor to the modern academic discipline of economics. In this and other works, Smith expounded how rational self-interest and competition can lead to economic prosperity. Smith was controversial in his own day and his general approach and writing style were often satirised by [[Tories (British political party)|Tory]] writers in the moralising tradition of Hogarth and Swift, as a discussion at the University of Winchester suggests.<ref>{{cite web |access-date=11 February 2010 |url=http://journalism.winchester.ac.uk/?page=343 |title=Adam Smith – Jonathan Swift |publisher=University of Winchester |url-status=dead |archive-url=https://web.archive.org/web/20091128233435/http://journalism.winchester.ac.uk/?page=343 |archive-date=28 November 2009}}</ref> In 2005, ''The Wealth of Nations'' was named among the 100 Best Scottish Books of all time.<ref name="100 Best Scottish Books, Adam Smith">[http://www.list.co.uk/articles/100-best-scottish-books/adam-smith/ 100 Best Scottish Books, Adam Smith] {{Webarchive|url=https://web.archive.org/web/20131020113357/http://www.list.co.uk/articles/100-best-scottish-books/adam-smith/ |date=20 October 2013 }} Retrieved 31 January 2012</ref>

In light of the arguments put forward by Smith and other economic theorists in Britain, academic belief in mercantilism began to decline in Britain in the late 18th century. During the [[Industrial Revolution]], Britain embraced free trade and Smith's ''laissez-faire'' economics, and via the [[British Empire]], used its power to spread a broadly liberal economic model around the world, characterised by open markets, and relatively barrier-free domestic and international trade.<ref>L.Seabrooke (2006). "Global Standards of Market Civilization". p. 192. Taylor & Francis 2006</ref>

[[George Stigler]] attributes to Smith "the most important substantive proposition in all of economics". It is that, under competition, owners of resources (for example labour, land, and capital) will use them most profitably, resulting in an equal rate of return in [[Economic equilibrium|equilibrium]] for all uses, adjusted for apparent differences arising from such factors as training, trust, hardship, and unemployment.<ref>Stigler, George&nbsp;J. (1976). "The Successes and Failures of Professor Smith," ''Journal of Political Economy'', 84(6), [https://www.jstor.org/pss/1831274 pp. 1199]–1213 [1202]. Also published as Selected Papers, No. 50 [https://google.com/scholar?q=cache:hs0XwYbafSgJ:scholar.google.com/&hl=en&as_sdt=80000000000000 (PDF)]{{dead link|date=June 2017 |bot=InternetArchiveBot |fix-attempted=yes }}, Graduate School of Business, University of Chicago.</ref>

[[Paul Samuelson]] finds in Smith's pluralist use of supply and demand as applied to wages, rents, and profit a valid and valuable anticipation of the [[general equilibrium]] modelling of [[Léon Walras|Walras]] a century later. Smith's allowance for wage increases in the short and intermediate term from capital accumulation and invention contrasted with [[Thomas Robert Malthus|Malthus]], [[David Ricardo|Ricardo]], and [[Karl Marx]] in their propounding a rigid subsistence–wage theory of labour supply.<ref>Samuelson, Paul A. (1977). "A Modern Theorist's Vindication of Adam Smith," ''American Economic Review'', 67(1), [https://www.jstor.org/pss/1815879 p. 42.] Reprinted in J.C. Wood, ed., ''Adam Smith: Critical Assessments'', pp. 498–509. [https://books.google.com/books?id=B8FY8mo5zX4C&pg=PA498=GBS_ATB Preview.] {{Webarchive|url=https://web.archive.org/web/20150319073244/http://books.google.com/books?id=B8FY8mo5zX4C&printsec=find&pg=PA498=gbs_atb |date=19 March 2015 }}</ref>

[[Joseph Schumpeter]] criticised Smith for a lack of technical rigour, yet he argued that this enabled Smith's writings to appeal to wider audiences: "His very limitation made for success. Had he been more brilliant, he would not have been taken so seriously. Had he dug more deeply, had he unearthed more recondite truth, had he used more difficult and ingenious methods, he would not have been understood. But he had no such ambitions; in fact he disliked whatever went beyond plain common sense. He never moved above the heads of even the dullest readers. He led them on gently, encouraging them by trivialities and homely observations, making them feel comfortable all along."<ref>{{cite book |title=Schumpeter History of Economic Analysis |location=New York |publisher=Oxford University Press |page=185}}</ref>

Classical economists presented competing theories to those of Smith, termed the "[[labour theory of value#The theory's development|labour theory of value]]". Later Marxian economics descending from classical economics also use Smith's labour theories, in part. The first volume of [[Karl Marx]]'s major work, ''Das Kapital'', was published in German in 1867. In it, Marx focused on the labour theory of value and what he considered to be the exploitation of labour by capital.<ref name="Roemer">[[John Roemer|Roemer, J.E.]] (1987). "Marxian Value Analysis". ''[[The New Palgrave: A Dictionary of Economics]]'', v. 3, 383.</ref><ref>[[Ernest Mandel|Mandel, Ernest]] (1987). "Marx, Karl Heinrich", ''The New Palgrave: A Dictionary of Economics'' v. 3, pp. 372, 376.</ref> The labour theory of value held that the value of a thing was determined by the labour that went into its production. This contrasts with the modern contention of [[neoclassical economics]], that the value of a thing is determined by what one is willing to give up to obtain the thing.

[[File:Adam Smith Theatre, Bennochy Road, Kirkcaldy.jpg|thumb|The Adam Smith Theatre in [[Kirkcaldy]]|alt=A brown building]]

The body of theory later termed "neoclassical economics" or "[[marginalism#The Marginal Revolution|marginalism]]" formed from about 1870 to 1910. The term "economics" was popularised by such neoclassical economists as [[Alfred Marshall]] as a concise synonym for "economic science" and a substitute for the earlier, broader term "[[political economy]]" used by Smith.<ref>{{cite book |author1=Marshall, Alfred |author2=Marshall, Mary Paley |year=1879 |url=https://books.google.com/books?id=NLcJAAAAIAAJ&pg=PA1 |title=The Economics of Industry |page=2 |publisher=Macmillan |isbn=978-1855065475 |access-date=13 May 2020 |archive-date=13 June 2020 |archive-url=https://web.archive.org/web/20200613110634/https://books.google.com/books?id=NLcJAAAAIAAJ&pg=PA1 |url-status=live }}</ref><ref>{{cite book |author=Jevons, W. Stanley |year=1879 |edition=2nd |url=https://books.google.com/books?id=aYcBAAAAQAAJ&pg=PR3 |title=The Theory of Political Economy |page=xiv |access-date=13 May 2020 |archive-date=13 June 2020 |archive-url=https://web.archive.org/web/20200613103855/https://books.google.com/books?id=aYcBAAAAQAAJ&pg=PR3 |url-status=live }}</ref> This corresponded to the influence on the subject of mathematical methods used in the [[natural science]]s.<ref name="Clark">Clark, B. (1998). ''Political-economy: A comparative approach'', 2nd ed., Westport, CT: Praeger. p. 32.</ref> Neoclassical economics systematised [[supply and demand]] as joint determinants of price and quantity in market equilibrium, affecting both the allocation of output and the distribution of income. It dispensed with the [[labour theory of value]] of which Smith was most famously identified with in classical economics, in favour of a [[marginal utility]] theory of value on the demand side and a more general theory of costs on the supply side.<ref>Campus, Antonietta (1987). "Marginalist Economics", ''The New Palgrave: A Dictionary of Economics'', v. 3, p. 320</ref>

The bicentennial anniversary of the publication of ''The Wealth of Nations'' was celebrated in 1976, resulting in increased interest for ''The Theory of Moral Sentiments'' and his other works throughout academia. After 1976, Smith was more likely to be represented as the author of both ''The Wealth of Nations'' and ''The Theory of Moral Sentiments'', and thereby as the founder of a moral philosophy and the science of economics. His ''[[homo economicus]]'' or "economic man" was also more often represented as a moral person. Additionally, economists David Levy and Sandra Peart in "The Secret History of the Dismal Science" point to his opposition to hierarchy and beliefs in inequality, including racial inequality, and provide additional support for those who point to Smith's opposition to slavery, colonialism, and empire. Emphasised also are Smith's statements of the need for high wages for the poor, and the efforts to keep wages low. In The "Vanity of the Philosopher: From Equality to Hierarchy in Postclassical Economics", Peart and Levy also cite Smith's view that a common street porter was not intellectually inferior to a philosopher,<ref>{{harvnb|Smith|1977|loc=§Book I, Chapter 2}}</ref> and point to the need for greater appreciation of the public views in discussions of science and other subjects now considered to be technical. They also cite Smith's opposition to the often expressed view that science is superior to common sense.<ref>"The Vanity of the Philosopher: From Equality to Hierarchy" in ''Postclassical Economics'' [http://www.wfu.edu/~hammond/review%20of%20Peart&Levy,%20final.pdf] {{Webarchive|url=https://web.archive.org/web/20121004085614/http://www.wfu.edu/~hammond/review%20of%20Peart%26Levy%2C%20final.pdf|archive-url=https://ghostarchive.org/archive/20221009/http://www.wfu.edu/~hammond/review%20of%20Peart%26Levy%2C%20final.pdf|archive-date=9 October 2022|url-status=live|date=4 October 2012}}</ref>

Smith also explained the relationship between growth of private property and civil government:

<blockquote>Men may live together in society with some tolerable degree of security, though there is no civil magistrate to protect them from the injustice of those passions. But avarice and ambition in the rich, in the poor the hatred of labour and the love of present ease and enjoyment, are the passions which prompt to invade property, passions much more steady in their operation, and much more universal in their influence. Wherever there is great property there is great inequality. For one very rich man there must be at least five hundred poor, and the affluence of the few supposes the indigence of the many. The affluence of the rich excites the indignation of the poor, who are often both driven by want, and prompted by envy, to invade his possessions. It is only under the shelter of the civil magistrate that the owner of that valuable property, which is acquired by the labour of many years, or perhaps of many successive generations, can sleep a single night in security. He is at all times surrounded by unknown enemies, whom, though he never provoked, he can never appease, and from whose injustice he can be protected only by the powerful arm of the civil magistrate continually held up to chastise it. The acquisition of valuable and extensive property, therefore, necessarily requires the establishment of civil government. Where there is no property, or at least none that exceeds the value of two or three days' labour, civil government is not so necessary. Civil government supposes a certain subordination. But as the necessity of civil government gradually grows up with the acquisition of valuable property, so the principal causes which naturally introduce subordination gradually grow up with the growth of that valuable property. (...) Men of inferior wealth combine to defend those of superior wealth in the possession of their property, in order that men of superior wealth may combine to defend them in the possession of theirs. All the inferior shepherds and herdsmen feel that the security of their own herds and flocks depends upon the security of those of the great shepherd or herdsman; that the maintenance of their lesser authority depends upon that of his greater authority, and that upon their subordination to him depends his power of keeping their inferiors in subordination to them. They constitute a sort of little nobility, who feel themselves interested to defend the property and to support the authority of their own little sovereign in order that he may be able to defend their property and to support their authority. Civil government, so far as it is instituted for the security of property, is in reality instituted for the defence of the rich against the poor, or of those who have some property against those who have none at all.<ref>''The Wealth of Nations'', Book 5, Chapter 1, Part 2</ref></blockquote>

===In British imperial debates===
Smith opposed empire. He challenged ideas that colonies were key to British prosperity and power. He rejected that other cultures, such as China and India, were culturally and developmentally inferior to Europe. While he favoured "commercial society", he did not support radical social change and the imposition of commercial society on other societies. He proposed that colonies be given independence or that full political rights be extended to colonial subjects.<ref>{{cite book |last=Pitts |first=Jennifer |url=https://books.google.com/books?id=szeU8olEDewC |title=A Turn to Empire: The Rise of Imperial Liberalism in Britain and France |date=2005 |publisher=Princeton University Press |isbn=978-1-4008-2663-6 |pages=39–58 |language=en}}</ref>

Smith's chapter on colonies, in turn, would help shape British imperial debates from the mid-19th century onward. ''The Wealth of Nations'' would become an ambiguous text regarding the imperial question. In his chapter on colonies, Smith pondered how to solve the crisis developing across the Atlantic among the empire's 13 American colonies. He offered two different proposals for easing tensions. The first proposal called for giving the colonies their independence, and by thus parting on a friendly basis, Britain would be able to develop and maintain a free-trade relationship with them, and possibly even an informal military alliance. Smith's second proposal called for a theoretical imperial federation that would bring the colonies and the metropole closer together through an imperial parliamentary system and imperial free trade.<ref>E.A. Benians, 'Adam Smith's project of an empire', ''Cambridge Historical Journal'' 1 (1925): 249–283</ref>

Smith's most prominent disciple in 19th-century Britain, peace advocate [[Richard Cobden]], preferred the first proposal. Cobden would lead the [[Anti-Corn Law League]] in overturning the [[Corn Laws]] in 1846, shifting Britain to a policy of free trade and empire "on the cheap" for decades to come. This hands-off approach toward the British Empire would become known as [[Cobdenism]] or the [[Manchester Liberalism|Manchester School]].<ref>Anthony Howe, ''Free trade and liberal England, 1846–1946'' (Oxford, 1997)</ref> By the turn of the century, however, advocates of Smith's second proposal such as [[Joseph Shield Nicholson]] would become ever more vocal in opposing Cobdenism, calling instead for imperial federation.<ref>J. Shield Nicholson, ''A project of empire: a critical study of the economics of imperialism, with special reference to the ideas of Adam Smith'' (London, 1909)</ref> As Marc-William Palen notes: "On the one hand, Adam Smith's late nineteenth and early twentieth-century Cobdenite adherents used his theories to argue for gradual imperial devolution and empire 'on the cheap'. On the other, various proponents of imperial federation throughout the British World sought to use Smith's theories to overturn the predominant Cobdenite hands-off imperial approach and instead, with a firm grip, bring the empire closer than ever before."<ref>Marc-William Palen, [http://journals.cambridge.org/action/displayAbstract?fromPage=online&aid=9159669&fileId=S0018246X13000101 "Adam Smith as Advocate of Empire, c. 1870–1932,"] {{Webarchive|url=https://web.archive.org/web/20150522065644/http://journals.cambridge.org/action/displayAbstract?fromPage=online&aid=9159669&fileId=S0018246X13000101 |date=22 May 2015 }} ''Historical Journal'' 57: 1 (March 2014): 179–198.</ref> Smith's ideas thus played an important part in subsequent debates over the British Empire.

===Portraits, monuments, and banknotes===
[[File:Adam Smith statue by Alexander Stoddart.jpg|thumb|upright=0.8|A statue of Smith in [[Edinburgh]]'s High Street, erected through private donations organised by the [[Adam Smith Institute]]]]

Smith has been commemorated in the UK on banknotes printed by two different banks; his portrait has appeared since 1981 on the [[Pound sterling|£]]50 notes issued by the [[Clydesdale Bank]] in Scotland,<ref name="clydesdale">{{cite web|url=http://aes.iupui.edu/rwise/banknotes/scotland/ScotlandP209-50Pounds-1981-donatedowl_f.jpg |title=Clydesdale 50 Pounds, 1981 |publisher=Ron Wise's Banknoteworld |access-date=15 October 2008 |archive-url=https://web.archive.org/web/20081030185820/http://aes.iupui.edu/rwise/banknotes/scotland/ScotlandP209-50Pounds-1981-donatedowl_f.jpg |archive-date=30 October 2008 |url-status=dead }}</ref><ref name="scotbanks">{{cite web|url=http://www.scotbanks.org.uk/banknotes_current_clydesdale_bank.php |title=Current Banknotes : Clydesdale Bank |publisher=The Committee of Scottish Clearing Bankers |access-date=15 October 2008 |archive-url=https://web.archive.org/web/20081003071439/http://www.scotbanks.org.uk/banknotes_current_clydesdale_bank.php |archive-date=3 October 2008 |url-status=dead }}</ref> and in March 2007 Smith's image also appeared on the new series of [[Bank of England £20 note|£20 notes]] issued by the [[Bank of England]], making him the first Scotsman to feature on an [[Bank of England note issues|English banknote]].<ref name="bbc1">{{cite news |url=http://news.bbc.co.uk/1/hi/business/6096938.stm |title=Smith replaces Elgar on £20 note |access-date=14 May 2008 |publisher=BBC |date=29 October 2006 |archive-url=https://web.archive.org/web/20070324062831/http://news.bbc.co.uk/1/hi/business/6096938.stm |archive-date=24 March 2007 |url-status=live}}</ref>

[[File:6 Burlington Gardens facade Smith.jpg|thumb|left|upright=0.8|Statue of Smith built in 1867–1870 at the old headquarters of the [[University of London]], [[6 Burlington Gardens]]]]

Between 1867 and 1870, a statue of Smith was built into the outside wall of [[6 Burlington Gardens]], then the headquarters of the [[University of London]] (now home to the [[Royal Academy of Arts]]).<ref>{{cite news |title=Mid-Georgian Portraits Catalogue — Adam Smith (1723-1790), Political economist |url=https://www.npg.org.uk/collections/search/personExtended/mp04140/adam-smith?tab=iconography |access-date=13 February 2025 |publisher=National Portrait Gallery}}</ref> A large-scale memorial of Smith by [[Alexander Stoddart]] was unveiled on 4 July 2008 in Edinburgh. It is a {{convert|10|ft|adj=on}}-tall bronze sculpture and it stands above the [[Royal Mile]] outside [[St&nbsp;Giles' Cathedral]] in Parliament Square, near the [[Mercat cross]].<ref>{{cite news |title=Adam Smith sculpture to tower over Royal Mile |date=26 September 2007 |work=[[Edinburgh Evening News]] |author=Blackley, Michael}}</ref> Sculptor [[Jim Sanborn]] has created multiple pieces which feature Smith's work. At [[Central Connecticut State University]] is ''Circulating Capital'', a tall cylinder which features an extract from ''The Wealth of Nations'' on the lower half, and on the upper half, some of the same text, but represented in [[binary code]].<ref>{{cite news |title=CCSU welcomes a new kid on the block |date=13 March 2001 |author=Fillo, Maryellen |work=[[The Hartford Courant]]}}</ref> At the [[University of North Carolina at Charlotte]], outside the Belk College of Business Administration, is ''Adam Smith's Spinning Top''.<ref>{{cite news |title=Piece at UNCC is a puzzle for Charlotte, artist says |date=20 May 1997 |author=Kelley, Pam |work=[[The Charlotte Observer]]}}</ref><ref>{{cite news |title=Artist sheds new light on sculpture |date=1 June 1997 |author=Shaw-Eagle, Joanna |work=[[The Washington Times]]}}</ref> Another Smith sculpture is at [[Cleveland State University]].<ref>{{cite web |url=http://www.sculpturecenter.org/oosi/sculpture.asp?SID=1055 |archive-url=https://web.archive.org/web/20050205065104/http://www.sculpturecenter.org/oosi/sculpture.asp?SID=1055 |archive-date=5 February 2005 |title=Adam Smith's Spinning Top |publisher=Ohio Outdoor Sculpture Inventory |access-date=24 May 2008}}</ref> Smith also appears as the narrator in the 2013 play ''[[The Low Road (play)|The Low Road]]'', centred on a proponent on ''laissez-faire'' economics in the late 18th century, but dealing obliquely with the [[2008 financial crisis]] and the [[Great Recession]]; he was portrayed by [[Bill Paterson (actor)|Bill Paterson]] in the premiere production at the [[Royal Court Theatre]] in London.<ref>{{cite web|author=Paul Taylor |url=https://www.independent.co.uk/arts-entertainment/theatre-dance/reviews/the-low-road-royal-court-london-8553085.html |archive-url=https://ghostarchive.org/archive/20220618/https://www.independent.co.uk/arts-entertainment/theatre-dance/reviews/the-low-road-royal-court-london-8553085.html |archive-date=18 June 2022 |url-access=subscription |url-status=live |title=The Low Road, Royal Court, London - Reviews - Theatre & Dance |newspaper=The Independent |date=28 March 2013 |accessdate=13 February 2025}}</ref>

A bust of Smith is in the Hall of Heroes of the [[National Wallace Monument]] in [[Stirling]]. Five paving stones, displaying quotations from Smith's works, were unveiled in December 2023 in the [[High Street, Glasgow]]. The stones were commissioned by the University of Glasgow to mark the 300th anniversary of Smith's birth.<ref>{{cite news |last1=Wilson |first1=Caroline |title=University of Glasgow honours famous graduate at historic site |url=https://www.heraldscotland.com/news/23964936.adam-smith-memorial-unveiled-university-glasgow/ |access-date=5 December 2023 |work=The Herald |date=4 December 2023 |page=11 |language=en}}</ref>

===Panmure House===
Adam Smith resided at [[Panmure House (Edinburgh)|Panmure House]] from 1778 to 1790. In 2008, the house was purchased by the [[Edinburgh Business School]] at [[Heriot-Watt University]] and funds were raised for its restoration.<ref>{{cite web |title=The restoration of Panmure House |url=http://www.adamsmith.org/blog/misc/the-restoration-of-panmure-house |url-status=dead |archive-url=https://web.archive.org/web/20120122103606/http://www.adamsmith.org/blog/misc/the-restoration-of-panmure-house |archive-date=22 January 2012}}</ref><ref>{{cite news |title=Adam Smith's Home Gets Business School Revival |url=https://www.bloomberg.com/video/adam-smith-s-home-gets-business-school-revival-byl368j8Sii~TiQiBHwEyw.html |work=Bloomberg |access-date=5 March 2017 |archive-date=24 June 2013 |archive-url=https://web.archive.org/web/20130624012444/http://www.bloomberg.com/video/adam-smith-s-home-gets-business-school-revival-byl368j8Sii~TiQiBHwEyw.html |url-status=live }}</ref> In 2018 it was formally opened as a study centre in Smith's honour.<ref>{{cite web |last1=Stephen |first1=Phyllis |title=Panmure House reopened for the people |url=https://theedinburghreporter.co.uk/2018/12/panmure-house-reopened-for-the-people/ |website=The Edinburgh Reporter |access-date=5 December 2023 |date=9 December 2018}}</ref>

===As a symbol of free-market economics===
Smith has been celebrated by advocates of free-market policies as the founder of free-market economics, a view reflected in the naming of bodies such as the [[Adam Smith Institute]] in London, multiple entities known as the "Adam Smith Society", including an historical Italian organisation,<ref name="urlThe Adam Smith Society">{{cite web |url=http://www.adamsmith.it/presentazione.html |archive-url=https://web.archive.org/web/20070721032612/http://www.adamsmith.it/presentazione.html |archive-date=21 July 2007 |title=The Adam Smith Society |access-date=24 May 2008 |publisher=The Adam Smith Society}}</ref> and the U.S.-based [[Adam Smith Society]],<ref name="Bloomberg">{{cite news|last1=Choi|first1=Amy|title=Defying Skeptics, Some Business Schools Double Down on Capitalism|url=https://www.bloomberg.com/bw/articles/2014-03-04/defying-skeptics-some-business-schools-double-down-on-capitalism|access-date=24 February 2015|publisher=[[Bloomberg Business News]]|date=4 March 2014|archive-date=26 February 2015|archive-url=https://web.archive.org/web/20150226101310/http://www.bloomberg.com/bw/articles/2014-03-04/defying-skeptics-some-business-schools-double-down-on-capitalism|url-status=live}}</ref><ref name="Who We Are">{{cite web|url=https://www.adamsmithsociety.com/html/our-history.html|title=Who We Are: The Adam Smith Society|date=April 2016|access-date=2 February 2019|archive-date=9 February 2019|archive-url=https://web.archive.org/web/20190209232453/https://www.adamsmithsociety.com/html/our-history.html|url-status=live}}</ref> and the Australian Adam Smith Club,<ref name="urlThe Australian Adam Smith Club">{{cite web |url=http://www.adamsmithclub.org/ |title=The Australian Adam Smith Club |access-date=12 October 2008 |publisher=Adam Smith Club |archive-url=https://web.archive.org/web/20100509212046/http://www.adamsmithclub.org/ |archive-date=9 May 2010 |url-status=dead }}</ref> and in terms such as the Adam Smith necktie.<ref>{{cite web |url=https://www.minneapolisfed.org/publications_papers/pub_display.cfm?id=3748 |title=Interview with Milton Friedman |last=Levy |first=David |date=June 1992 |publisher=Federal Reserve Bank of Minneapolis |access-date=1 September 2008 |archive-date=3 September 2009 |archive-url=https://web.archive.org/web/20090903222048/http://www.minneapolisfed.org/publications_papers/pub_display.cfm?id=3748 |url-status=live }}</ref>

Former US Federal Reserve Chairman [[Alan Greenspan]] argues that, while Smith did not coin the term ''[[laissez-faire]]'', "it was left to Adam Smith to identify the more-general set of principles that brought conceptual clarity to the seeming chaos of market transactions." Greenspan continues that ''The Wealth of Nations'' was "one of the great achievements in human intellectual history."<ref name="urlFRB: Speech, Greenspan – Adam Smith – 6 February 2005">{{cite web |url=http://www.federalreserve.gov/boarddocs/speeches/2005/20050206/default.htm |title=FRB: Speech, Greenspan – Adam Smith – 6 February 2005 |access-date=31 May 2008 |archive-url=https://web.archive.org/web/20080512080427/http://www.federalreserve.gov/boarddocs/speeches/2005/20050206/default.htm |archive-date=12 May 2008 |url-status=dead }}</ref> [[P.J. O'Rourke]] describes Smith as the "founder of free market economics."<ref name="urlAdam Smith: Web Junkie – Forbes.com">{{cite news |url=https://www.forbes.com/free_forbes/2007/0507/086.html |title=Adam Smith: Web Junkie |work=Forbes |access-date=10 June 2008 |date=5 July 2007 |archive-url=https://web.archive.org/web/20080520232632/http://www.forbes.com/free_forbes/2007/0507/086.html |archive-date=20 May 2008 |url-status=live}}</ref>

[[List of Nobel laureates|Nobel laureate]] economist [[Milton Friedman]] believed in 1976, 200 years after the publishing of ''The Wealth of Nations'', that the work of Adam Smith was, "...far more immediately relevant today than he was at the Centennial of The Wealth of Nations in 1876."<ref>{{cite web |title=From 1976: Adam Smith's Relevance for 1976 |url=https://www.chicagobooth.edu/review/adam-smiths-relevance-1976 |access-date=24 August 2023 |website=The University of Chicago Booth School of Business |language=en}}</ref>

Other writers have argued that Smith's support for ''laissez-faire'' (which in French means leave alone) has been overstated. [[Herbert Stein]] wrote that the people who "wear an Adam Smith necktie" do it to "make a statement of their devotion to the idea of free markets and [[limited government]]", and that this misrepresents Smith's ideas. Stein writes that Smith "was not pure or doctrinaire about this idea. He viewed government intervention in the market with great skepticism...yet he was prepared to accept or propose qualifications to that policy in the specific cases where he judged that their net effect would be beneficial and would not undermine the basically free character of the system. He did not wear the Adam Smith necktie." In Stein's reading, ''The Wealth of Nations'' could justify the [[Food and Drug Administration]], the [[Consumer Product Safety Commission]], mandatory employer health benefits, environmentalism, and "[[Pigovian tax|discriminatory taxation]] to deter [[sin tax|improper]] or [[sumptuary tax|luxurious behavior]]".<ref>{{cite journal |author=Stein, Herbert |date=6 April 1994 |title=Board of Contributors: Remembering Adam Smith |journal=[[The Wall Street Journal Asia]] |page=A14}}</ref>

Similarly, Vivienne Brown stated in ''[[The Economic Journal]]'' that in the 20th-century United States, [[Reaganomics]] supporters, ''[[The Wall Street Journal]]'', and other similar sources have spread among the general public a partial and misleading vision of Smith, portraying him as an "extreme dogmatic defender of ''laissez-faire'' capitalism and [[supply-side economics]]".<ref name="Brown93">{{cite journal |author=Brown, Vivienne |date=January 1993 |journal=[[The Economic Journal]] |volume=103 |issue=416 |pages=230–232 |doi=10.2307/2234351 |title=Untitled review of 'Capitalism as a Moral System: Adam Smith's Critique of the Free Market Economy' and 'Adam Smith and his Legacy for Modern Capitalism' |last2=Pack |first2=Spencer J. |last3=Werhane |first3=Patricia H. |jstor=2234351}}</ref> In fact, ''The Wealth of Nations'' includes the following statement on the payment of taxes:

<blockquote>The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state.<ref name="Smith 1977 loc=bk. V, ch. 2">{{harvnb|Smith|1977|loc=bk. V, ch. 2}}</ref></blockquote>

Some commentators have argued that Smith's works show support for a progressive, not flat, income tax and that he specifically named taxes that he thought should be required by the state, among them [[Luxury tax|luxury-goods taxes]] and tax on rent.<ref>{{cite magazine |url=https://www.newyorker.com/arts/critics/books/2010/10/18/101018crbo_books_gopnik |title=Market Man |date=18 October 2010 |magazine=The New Yorker |access-date=20 February 2020 |archive-date=28 May 2014 |archive-url=https://web.archive.org/web/20140528113724/http://www.newyorker.com/arts/critics/books/2010/10/18/101018crbo_books_gopnik |url-status=live }}</ref> Yet Smith argued for the "impossibility of taxing the people, in proportion to their economic revenue, by any capitation".<ref>''The Wealth of Nations,'' V.ii.k.1</ref> Smith argued that taxes should principally go toward protecting "justice" and "certain publick institutions" that were necessary for the benefit of all of society, which could not be adequately provided by private enterprise.<ref>''The Wealth of Nations,'' IV.ix.51</ref>

Additionally, Smith outlined the proper expenses of the government in ''The Wealth of Nations, Book V, Ch. I''. Included in his requirements of a government is to enforce contracts and provide justice system, grant patents and copy rights, provide public goods such as infrastructure, provide national defence, and regulate banking. The role of the government was to provide goods "of such a nature that the profit could never repay the expense to any individual" such as roads, bridges, canals, and harbours. He also encouraged invention and new ideas through his patent enforcement and support of infant industry monopolies. He supported partial public subsidies for elementary education, and he believed that competition among religious institutions would provide general benefit to the society. In such cases, Smith argued for local rather than centralised control: "Even those publick works which are of such a nature that they cannot afford any revenue for maintaining themselves ... are always better maintained by a local or provincial revenue, under the management of a local and provincial administration, than by the general revenue of the state" (''Wealth of Nations,'' V.i.d.18). Finally, he outlined how the government should support the dignity of the monarch or chief magistrate, such that they are equal or above the public in fashion. He further stated that monarchs should be provided for in a greater fashion than magistrates of a republic because "we naturally expect more splendor in the court of a king than in the mansion-house of a [[Doge (title)|doge]]".<ref>{{harvnb|Smith|1977|loc=bk. V}}</ref> In addition, he allowed that in some specific circumstances, retaliatory tariffs may be beneficial:

<blockquote>The recovery of a great foreign market will generally more than compensate the transitory inconvenience of paying dearer during a short time for some sorts of goods.<ref>Smith, A., 1976, ''The Glasgow edition'', vol. 2a, p. 468.</ref></blockquote>

However, he added that in general, a retaliatory tariff "seems a bad method of compensating the injury done to certain classes of our people, to do another injury ourselves, not only to those classes, but to almost all the other classes of them".<ref>''The Wealth of Nations,'' IV.ii.39</ref>

[[Economic historian]]s such as [[Jacob Viner]] regard Smith as a strong advocate of free markets and limited government (what Smith called "natural liberty"), but not as a dogmatic supporter of ''laissez-faire''.<ref name="Viner 1927">{{cite journal |author=Viner, Jacob |date=April 1927 |journal=[[The Journal of Political Economy]] |volume=35 |issue=2 |pages=198–232 |doi=10.1086/253837 |title=Adam Smith and Laissez-faire |jstor=1823421|s2cid=154539413 }}</ref>

Economist [[Daniel B. Klein|Daniel Klein]] believes using the term "free-market economics" or "free-market economist" to identify the ideas of Smith is too general and slightly misleading. Klein offers six characteristics central to the identity of Smith's economic thought and argues that a new name is needed to give a more accurate depiction of the "Smithian" identity.<ref>{{cite journal |author=Klein, Daniel B. |year=2008 |title=Toward a Public and Professional Identity for Our Economics |journal=Econ Journal Watch |volume=5 |issue=3 |pages=358–372 |url=http://econjwatch.org/articles/toward-a-public-and-professional-identity-for-our-economics |access-date=10 February 2010 |archive-url=https://web.archive.org/web/20131228231445/http://econjwatch.org/articles/toward-a-public-and-professional-identity-for-our-economics |archive-date=28 December 2013 |url-status=dead }}</ref><ref>{{cite journal |author=Klein, Daniel B. |year=2009 |title=Desperately Seeking Smithians: Responses to the Questionnaire about Building an Identity |journal=Econ Journal Watch |volume=6 |issue=1 |pages=113–180 |url=http://econjwatch.org/articles/desperately-seeking-smithians-responses-to-the-questionnaire-about-building-an-identity |access-date=10 February 2010 |archive-url=https://web.archive.org/web/20131228232751/http://econjwatch.org/articles/desperately-seeking-smithians-responses-to-the-questionnaire-about-building-an-identity |archive-date=28 December 2013 |url-status=dead }}</ref> Economist [[David Ricardo]] set straight some of the misunderstandings about Smith's thoughts on free market. Many continue to fall victim to the thinking that Smith was a free-market economist without exception, though he was not. Ricardo pointed out that Smith was in support of helping infant industries. Smith believed that the government should subsidise newly formed industry, but he did fear that when the infant industry grew into adulthood, it would be unwilling to surrender the government help.<ref name="New Ideas From Dead Economists">Buchholz, Todd (December 1990). pp. 38–39.</ref> Smith also supported tariffs on imported goods to counteract an internal tax on the same good. Smith also fell to pressure in supporting some tariffs in support for national defence.<ref name="New Ideas From Dead Economists"/>

Some have also claimed, [[Emma Rothschild]] among them, that Smith would have supported a minimum wage,<ref>Martin, Christopher. "Adam Smith and Liberal Economics: Reading the Minimum Wage Debate of 1795–96," ''Econ Journal Watch'' 8(2): 110–125, May 2011 [http://econjwatch.org/articles/adam-smith-and-liberal-economics-reading-the-minimum-wage-debate-of-1795-96] {{Webarchive|url=https://web.archive.org/web/20131228230820/http://econjwatch.org/articles/adam-smith-and-liberal-economics-reading-the-minimum-wage-debate-of-1795-96|date=28 December 2013}}</ref> although no direct textual evidence supports the claim. Indeed, Smith wrote:

<blockquote>The price of labour, it must be observed, cannot be ascertained very accurately anywhere, different prices being often paid at the same place and for the same sort of labour, not only according to the different abilities of the workmen, but according to the easiness or hardness of the masters. Where wages are not regulated by law, all that we can pretend to determine is what are the most usual; and experience seems to show that law can never regulate them properly, though it has often pretended to do so. (''The Wealth of Nations'', Book 1, Chapter 8)</blockquote>

However, Smith also noted, to the contrary, the existence of an [[equality of bargaining power|imbalanced, inequality of bargaining power]]:<ref>A Smith, ''Wealth of Nations'' (1776) Book I, ch 8</ref>
<blockquote>A [[landlord]], a farmer, a master manufacturer, a merchant, though they did not employ a single [[Working class|workman]], could generally live a year or two upon the stocks which they have already acquired. Many workmen could not subsist a week, few could subsist a month, and scarce any a year without employment. In the long run, the workman may be as necessary to his master as his master is to him, but the necessity is not so immediate.</blockquote>