Since we are competing with others who offer similar products and services, it is in our self-interest to develop the best, most desirable product possible. To do that, we must offer a product or service that is desirable to other people. It is in our self-interest, for example, to earn money and provide for our families. Smith saw no conflict between self-interest and the good of society.
Instead, if people are left free to pursue their own economic self-interest, the market will move organically in the direction of greater prosperity for a greater number of people, he wrote. The government should not and cannot use the force of law to bring about a particular economic outcome.
In France, a group called the Physiocrats (literally the "rule of nature") developed the laissez-faire philosophy of economics, arguing that markets function best when free of government constraints and meddling.Īdam Smith, the second father of classical liberalism, reinforced the laissez-faire philosophy with his seminal work, "The Wealth of Nations." The Scottish philosopher wrote of the "invisible hand" guiding the course of free markets. Locke launched a wave of libertarian thought that climaxed in the 18th century.
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