of natural liberty establishes itself of its own accord.” But even then he restricted his concern to “extraordinary encouragements” or “extraordinary restraints.” And he cited three specific roles that government ought to fulfill: defending the country from invasion, enforcing the laws so as to protect individuals from injustice, and providing for the public works and institutions that private individuals would not find profitable (like protecting New Orleans from hurricanes).

Modern economists have noted that Smith’s devotion to the invisible hand was expressed in rather qualified language. “There can be little doubt that Smith’s faith in the power of an invisible hand has been exaggerated by modern commentators,” Princeton economist Alan Krueger wrote in an introduction to a recent reprinting of Wealth of Nations.6 Besides, Krueger added, “most of postwar economics can be thought of as an effort to determine theoretically and empirically when, and under what conditions, Adam Smith’s invisible hand turns out to be all thumbs.”7

All this is not to say that Smith’s support for free enterprise is entirely a misreading. (Nor am I saying that free enterprise is exactly a bad idea.) But as economists who followed Smith often observed, his invisible hand does not always guarantee efficient markets or fairness. A critique by Thomas Edward Cliffe Leslie, an economic historian in Belfast, about a century after Wealth of Nations appeared, noted that Smith wrote in a preindustrial age. However deep his insights into the world he lived in, Smith was nevertheless incapable of escaping his own time.

Some of Smith’s followers, Cliffe Leslie wrote, considered Wealth of Nations not just an “inquiry,” as Smith’s full title suggested, but “a final answer to the inquiry—a body of necessary and universal truth, founded on invariable laws of nature, and deduced from the constitution of the human mind.” Cliffe Leslie demurred: “I venture to maintain, to the contrary, that political economy is not a body of natural laws in the true sense, but an assemblage of speculations and doctrines … colored even by the history and character of its chief writers.”8

Cliff Leslie’s account, published in 1870, dismissed the idea—



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