Adam Smith critiques the Deficit Reduction Commission

by Liberty and Power

This essay in the history of economic thought is worth reading.

More Comments:

Allan Walstad - 12/10/2010

Thanks. Sorry I didn't get back here earlier. I was not under the impression that Smith or the other classicals wanted to "free markets from rent and interest," either. Does that even make sense?

Mark Brady - 12/9/2010

Good question. Certainly, classical school economists disagreed vigorously among themselves over theory and policy, not least because their ideas evolved over the best part of a century from the Wealth of Nations to the eve of the Marginal Revolution. That said, they believed the state performed essential functions that would necessarily require taxation, and it was widely held that taxation of land rents would be the least harmful form of taxation. The reference to the "government power to ... regulate prices to keep them in line with socially necessary costs of production" is a mystery to me right now.

Allan Walstad - 12/8/2010

Hudson: "Their [classical economists'] idea was to free markets from rent and interest, not to dismantle government power to tax and regulate prices to keep them in line with socially necessary costs of production."

Is that correct?