The many lives of Adam Smith ♻️

In July 1790, philosopher Adam Smith summoned friends to his bedside in Edinburgh and gave them a final command: burn my work. He watched as they threw sixteen volumes of unpublished manuscripts into the fire, destroying a lifetime of unfinished thoughts in a single afternoon.

Smith was obsessed with his intellectual legacy, terrified of being misunderstood. He wanted to be judged only by the finished logic of his published works.

Ironically, Smith has become one of history’s most reused and misconstrued thinkers. The story of the Scot’s 250-year-old magnum opus, An Inquiry into the Nature and Causes of the Wealth of Nations, and his thinking, is really about how his ideas have been reinterpreted as the global economy has evolved.

This is Smith’s latest reinvention: not as mascot of neoliberalism but as conduit for thinking about what comes next. Every iteration reflects what the current age wants from capitalism, history’s most successful wealth-creating ideology. 

Public interest

One of Smith’s main targets in The Wealth of Nations was powerful merchant companies which leveraged wealth to rig the economy, raise prices, and drag nations into costly wars and socialise the bill through bailouts and taxes.

Smith did not think all profit was virtuous. He did not assume every successful merchant was serving the public good. He knew concentration could distort prices and that people with money are often very good at explaining why their private advantage is somehow in the public interest. 

Smith warned that the interests of those who live by profit are “never exactly the same with that of the public” and that they generally have an interest “to deceive and even to oppress the public”.

Father of capitalism

Smith is often presented as the father of capitalism. But in The Wealth of Nations, Smith didn’t even use the word capitalism. He called it a “system of natural liberty”.

A leading historian of Smith, Glory Liu, told the Weekend Read that the moniker makes the philosopher sound like a full-throated endorser of capitalism, baggage included: profit as an end in itself, self-interest as the primary motive of human interaction, growth at all costs. “When we say, Smith is the father of capitalism, it’s bundled with all these assumptions about why capitalism is good,” Liu said. Smith, she argues, questioned many of these assumptions. 

No deal

The familiar version of Smithism comes largely from the mid-20th century, especially the Chicago School of Economics, which emphasised free-market principles, monetarism, and minimal government intervention. There was also a wider neoliberal attempt to revive classical liberalism amid big government ascendency, characterised by FDR’s New Deal and the centrally planned economies of the USSR. The father of capitalism helped provide moral and intellectual cover for a version of capitalism cooked up during the post-Depression war of ideologies. 

Liu believes Smith has endured because he proved so politically malleable. The canonisation of Smith began long before Chicago, she says, and he has repeatedly been used as a “political rally figure” and a source of “intellectual heft” for various ideologies in the years since 1776.

For example, Smith’s famous invisible hand appears exactly once in The Wealth of Nations. Smith used it to describe a specific preference for domestic trade over foreign investment. But by the mid-20th century, the metaphor had been stretched into an all-encompassing doctrine of ‘markets know best’.

Human creatures

The modern attempt to draft Smith into the small government camp ignores his very specific blueprint for the state. Smith believed the rich should contribute to the public purse “something more than in proportion” to their wealth. 

He argued for taxes on luxury goods like carriages and silk to fund “public works” that the private sector would never bother with: roads, bridges, and canals. “It’s all part of this larger vision. What are the things the state really has to do, because no other institution can be entrusted with these kinds of tasks,” Liu said. A commercial society required moral as well as economic infrastructure, echoing the Biden administration’s 2021 human infrastructure bill which included money for schools as well as roads.  

Superstitions and enthusiasms 

Smith’s famous example of the pin factory illustrates how dividing production into small, repeatable tasks could multiply output dramatically. But he also warned that such narrow division of labour could leave workers “as stupid and ignorant as it is possible for a human creature to become”.

Public education, for Smith, was meant to counter these negative effects. His fear was not simply that repetitive labour made workers less productive as human beings, but that it made them more vulnerable as citizens. What he called superstitions and enthusiasms was his shorthand for irrational collective passions taking hold. He was writing about the social dangers of his own age, but the maxim still resonates in our world shaped by atomisation and political grievance. 

Trinkets and baubles

Smith was no friend to corporate elites. He saw that the ultra-wealthy of the 18th century would rather spend their fortunes on trinkets and baubles than on their workers. “All for ourselves, and nothing for other people, seems, in every age of the world, to have been the vile maxim of the masters of mankind,” he mused. 

Smith warned when “merchants and manufacturers” gain the upper hand, they inevitably “narrow the competition” and “levy, for their own benefit, an absurd tax upon the rest of their fellow-citizens”.

Once competition weakens and power concentrates, the interests of the firm drift away from those of the public. The current label for this is enshittification: the tendency of dominant platforms to get worse as they become more entrenched and less accountable to users.

Distortion field

Across the advanced economies, concern about concentration and market power has become mainstream. Nowhere is this more evident than Big Tech. On one side are the innovations and efficiencies. On the other, the Smithian problem of scale turning into political power and market distortion. 

Between Trump’s first and second administrations, the market value of the major US tech giants ballooned from about $3.4tn at the end of 2017 to around $14.3tn by the end of 2024. Trump 2.0 has cultivated a close relationship with Big Tech, leveraging their apps and algos to get elected, and their platform power to broadcast and legitimise his agenda.

Beyond capitalism 

Capitalism has been credited with one of the biggest reductions in extreme poverty ever recorded. World Bank data suggest the number of people living in extreme poverty fell from around 2.3 billion in 1990 to about 831 million in 2025, driven largely by growth in Asia.

While capitalism lifted billions out of extreme poverty, it also left a global economy where the top 1% captured nearly forty times more wealth than the bottom half.

According to the World Inequality Report 2022, the richest 10% of the global population receive 52% of global income, while the poorest half receive 8%. Wealth is even more concentrated: the richest 10% own three-quarters of global wealth, while the poorest half own just 2%. These disparities are driving people to reach for something beyond neoliberalism, beyond capitalism, especially among the young who have been shut out of good jobs, affordable housing, and decent wages. 

Patron saint

“Smith conceded that there would be inequalities, but that they wouldn’t be so vast,” Liu said. Smith’s litmus test of a successful society is not output but whether ordinary people can meet their basic needs. “He wants to see high wages, a much more compressed distribution of income and low profits,” Liu added.

Since the Obama years, Liu said, and especially in the broader post-Piketty climate, there has been renewed interest in Smith over the way wealth and power erodes our “moral sentiments”. The former patron saint of capitalism serves as a reminder that markets only maintain legitimacy if prosperity is broad and power checked.