The Real Adam Smith

Most people who have heard of Adam Smith know him only as an advocate for free markets, author of the famous sentences,

It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love.

But Smith was actually not a believer in unregulated capitalism. As Amartya Sen explains in this essay, he was primarily a moral thinker. He believed that society's leaders should be constantly promoting "humanity, justice, generosity, and public spirit", which were, he thought, as necessary to a successful society as economic production. Smith also supported a long list of government interventions in the economy, including support for new industries, prosecution of fraud and imposture, protection of working people from exploitation and abuse, and, especially, action to break up monopolies and cabals. He was a bitter opponent of slavery. As Sen summarizes,

Smith was convinced of the necessity of a well-functioning market economy, but not of its sufficiency.