Adam Smith on Justice and Social Policy

In the Wealth of Nations justice takes on new dimensions imposed by the necessity of articulating a sound set of principles as the basis for social policy. Justice functions on an intergroup or interclass level as well as the interpersonal level. The concept of the spectator (involving the psychological process of sympathy) is appropriate to individual moral development, but not to social policy. The meaning appropriate to social policy is impartial treatment which implies equality before the law; no individual or group is to be awarded special privileges or forced to endure special restraints: “To hurt in any degree the interest of any one order of citizens for no other purpose but to promote that of some other, is evidently contrary to that justice and equality of treatment which the sovereign owes to all the different orders of his subjects.”

The elimination of preferences and restraints which is the “simple and obvious system of natural liberty and natural justice” is the main policy theme of the Wealth of Nations. If one had to choose a single passage from the Wealth of Nations which expresses its policy intent most adequately, it would not be the invisible hand passage, which is so persistently misunderstood, but the following passage: “All systems either of preference or of restraint, therefore, being thus completely taken away, the obvious and simple system of natural liberty establishes itself of its own accord. Every man, as long as he does not violate the laws of justice, is left perfectly free to pursue his own interest in his own way, and to bring both his industry and capital into competition with those of any other man, or order of men.” The system of natural liberty and natural justice can only be understood as the contradiction of the systems either of preference or of restraint. The whole point of Books III and IV of the Wealth of Nations is to understand the demands of impartiality in the social order. Smith was very explicit about this organization in the Introduction to the Wealth of Nations. He points out that “the policy of some nations has given extraordinary encouragement to the industry of the country; that of others to the industry of towns. Scarce any nation has dealt equally and impartially with every sort of industry.”

References:

  1. Campbell, William F. “Adam Smith’s Theory of Justice, Prudence, and Beneficence.” The American Economic Review 57.2, Papers and Proceedings of the Seventy-ninth Annual Meeting of the American Economic Association (1967): 571-77.
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