Adam Smith: Advice for how to order and govern economic life

Abstract

Adam Smith broke with mercantilist orthodoxy and is beyond being considered a prophet of conservative reaction. Smith was magnificently in touch with his own times and with practical matters. As a theoretical economist, he contributed to a system that had not yet been consolidated and provided a method of how to order and govern economic life. Smith assumed that the private interest and the public interest coincided. What he sought was to emphasize that the “invisible hand” leads the private interests and passions of men towards what is best for the interests of the whole society. For Smith, by rationalizing selfish instincts, they could become social virtues. Then, the egoistic motives of men, transformed by mutual action among themselves, produce the most unexpected result: social harmony.