"Natural Liberty" Was Never a Slavish Absolute for Adam Smith
“C.W.” posts (1 November) in The Economist Blog HERE
I shall comment later on “C.W.’s” actual post, but first I draw Lost Legacy readers’ attention to a comment on it from “Jomiku”:
“Here's an example of misquoting Smith. Take this line:
"The obligation of building party walls, in order to prevent the communication of fire, is a violation of natural liberty, exactly of the same kind with the regulations of the banking trade which are here proposed."
I've seen that quoted. It's pretty clear, isn't it that we shouldn't regulate.” (WN II.ii.94: 324).
As a misquotation by selective distortion it is indeed a nonsensical and silly misrepresentation of Smith’s meaning as “Jomiku” carefully makes clear by quoting the full paragraph.
Moreover, if extreme “natural liberty” included such nonsensical – even suicidal – extremism as to leave it to owners in multi-occupied buildings whether they build party walls between their property and the properties of others in the same building, it would expose other occupants (and the delinquent non-builder of party walls!) to the perils of a rapidly spreading fire throughout the whole building. Fortunately, such a “violation of natural liberty” is perfectly acceptable to most people, including moderate Libertarians, on grounds of good sense.
However, the persons who misquote this statement in an pathetic attempt to distort its meaning, presumably in some half-baked attempt to mislead the innocent into believing that Smith believed “we shouldn’t regulate”, do their cause no favours, and expose themselves and their cause to ridicule.
So here is the quote in the context of the whole paragraph (partly provided by “Jomiku”):
“To restrain private people, it may be said, from receiving in payment the promissory notes of a banker, for any sum whether great or small, when they themselves are willing to receive them; or, to restrain a banker from issuing such notes, when all his neighbours are willing to accept of them, is a manifest violation of that natural liberty which it is the proper business of law, not to infringe, but to support. Such regulations may, no doubt, be considered as in some respect a violation of natural liberty. But those exertions of the natural liberty of a few individuals, which might endanger the security of the whole society, are, and ought to be, restrained by the laws of all governments; of the most free, as well as of the most despotical. The obligation of building party walls, in order to prevent the communication of fire, is a violation of natural liberty, exactly of the same kind with the regulations of the banking trade which are here proposed.”
In short: “Jomiku” correctly asserts and concludes: “Smith meant these regulations (banning bank notes for small denominations and erecting party walls) are both good and necessary. The opposite of what I've seen the quote used for saying.”
I heartily agree and congratulate “Jomiku” for pointing this out to the Economist Blog.