Monday, September 08, 2008

Adam Smith's Sufficient Conditions for Opulence

A shy Blogger enquires (HERE) on the Isegoria Blog (8 September):

What do Lego and 18th century political economist Adam Smith have in common?” and tells readers that “ Both show why Denmark has become the best country in the world for business”.

Speaking two decades before The Wealth of Nations was published in 1776, Smith said, "Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things."

If ever there was a system that made following Smith's recipe look easy, it's the Danish economy's mix of low inflation and low unemployment, emphasis on entrepreneurship and lower taxes. These qualities combined with high marks for innovation and technological savvy lift Denmark to the top of our third annual ranking of the Best Countries for Business (formerly the Forbes Capital Hospitality Index).”

The Blogger does not identify herself (himself) but probably comes for Denmark and perhaps lives in or has visited the United States recently.

On the subject of the post, I cannot argue against it. It is true that Smith is believed to have read his paper at a Political Economy Club in Glasgow in 1755 and that it contained the passage quoted.

The problem is that only Dugald Stewart – the source for the quotation in 1793 – appears to have been the only person to have seen the paper and it was never published. His son, during a bout of mental illness, is believed to have burned it, along with some other of his father’s papers.

To what extent Denmark corresponds to the sufficient conditions allegedly mentioned by Adam Smith is something I cannot judge, but I am happy to pass the post onto readers.

One interesting possibility from Stewart's quotations is that it is possible that not all of Smith's strenuous efforts to have his private papers burned just before he died may not have been completely successful.

Maybe more will turn up one day.



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