Dugald Stewart gave a presentation to the Royal Society of Edinburgh in 1793 three years after Smith’s death. He wanted to show the consistency of some of Smith’s ideas “at a very early period” two decades before the publication of The Wealth of Nations. One of these ideas was that if left alone a society will produce its own spontaneous order, or what he termed “her own designs.” Also in this passage Smith hints that he advocates a policy by the government of “laissez-faire” (or hands off), or again in his terms “to let her (nature) alone, and give her fair play in the pursuit of her ends”. The second idea in this “early Smith” is a clear statement of the policy of very limited government which he believed should limited to three things: peace, low taxes, and an acceptable (and presumable also cheap) system of justice. To what extent Smith continued to believe these principles in 1776 is open to debate. What is interesting here is that there is no mention of government provision of public goods which was later to play an important role in the Smithian state as described in Wealth of Nations.
Adam Smith on the need for “peace, easy taxes, and a tolerable administration of justice” (1755)
Dugald Stewart had in his possession some notes of lectures Adam Smith gave in 1755, some 21 years before the appearance of the Wealth of Nations (1776). Here Smith gives a pithy description of what he thought the government should do to encourage economic development:
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. All governments which thwart this natural course, which force things into another channel, or which endeavour to arrest the progress of society at a particular point, are unnatural, and to support themselves are obliged to be oppressive and tyrannical.
I am aware that the evidence I have hitherto produced of Mr Smith’s originality may be objected to as not perfectly decisive, as it rests entirely on the recollection of those students who attended his first courses of moral philosophy at Glasgow; a recollection which, at the distance of forty years, cannot be supposed to be very accurate. There exists, however, fortunately, a short manuscript drawn up by Mr. Smith in the year 1755, and presented by him to a society of which he was then a member; in which paper, a pretty long enumeration is given of certain leading principles, both political and literary, to which he was anxious to establish his exclusive right; in order to prevent the possibility of some rival claims which he thought he had reason to apprehend, and to which his situation as a Professor, added to his unreserved communications in private companies, rendered him peculiarly liable. This paper is at present in my possession. It is expressed with a good deal of that honest and indignant warmth, which is perhaps unavoidable by a man who is conscious of the purity of his own intentions, when he suspects that advantages have been taken of the frankness of his temper. On such occasions, due allowances are not always made for those plagiarisms, which, however cruel in their effects, do not necessarily imply bad faith in those who are guilty of them; for the bulk of mankind, incapable themselves of original thought, are perfectly unable to form a conception of the nature of the injury done to a man of inventive genius, by encroaching on a favourite speculation. For reasons known to some members of this Society, it would be improper, by the publication of this manuscript, to revive the memory of private differences; and I should not have even alluded to it, if I did not think it a valuable document of the progress of Mr Smith’s political ideas at a very early period. Many of the most important opinions in The Wealth of Nations are there detailed; but I shall quote only the following sentences:
‘Man is generally considered by statesmen and projectors as the materials of a sort of political mechanics. Projectors disturb nature in the course of her operations in human affairs; and it requires no more than to let her alone, and give her fair play in the pursuit of her ends, that she may establish her own designs.’
—And in another passage:
‘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. All governments which thwart this natural course, which force things into another channel, or which endeavour to arrest the progress of society at a particular point, are unnatural, and to support themselves are obliged to be oppressive and tyrannical.’
—’A great part of the opinions (he observes) enumerated in this paper is treated of at length in some lectures which I have still by me, and which were written in the hand of a clerk who left my service six years ago. They have all of them been the constant subjects of my lectures since I first taught Mr Craigie’s class, the first winter I spent in Glasgow, down to this day, without any considerable variation. They had all of them been the subjects of lectures which I read at Edinburgh the winter before I left it, and I can adduce innumerable witnesses, both from that place and from this, who will ascertain them sufficiently to be mine.’