Adam Smith and reality

Adam Smith was a moral philosopher. An Inquiry into the Nature and Causes of the Wealth of Nations, written 1776, is a follow up to The Theory of Moral sentiments (1759). Unfettered capitalism, as proposed by today's neoliberals, would have been unacceptable to the 'Father of Capitalism'.

Smith clearly states in Wealth of Nations, government should regulate business which always seems to evolve into monopoly. On the other hand, the people should beware of instances when government and business create laws, as these will not benefit society but business.

Given Wealth of Nations is cumbersome reading, very few 'students of Smith' actually realise the rational economic actor-homo economicus  -is a moral economic being. Wealth of Nations is advanced Theory of Moral Sentiments. Thus, progressive taxation and the support of infant industries are seen as essential to all economic progression. All actors who use capital to support the domestic sector realise the greatest value through the ' invisible hand'.

Adam Smith emphasizes that wealth is a function of  labour and not the amount of gold plus silver at hand. In Zimbabwe, with 80% unemployment rates, they is no real wealth. To grow the economy, domestic resources should support local industrialisation. Futhermore, tax and policy should not disadvantage the masses but truly uplift. Thus economics has a morally scientifc foundation at its classical root.