Adam Smith on the functions of government

Lagrangian Republican Association promotes the establishment of independent and sovereign republic, which is based on the principles classical republicanism and classical liberalism. With classical liberalism we mean the tradition in political theory based on the works of Adam Smith and John Stuart Mill. In this post I will discuss Smith’s vision on the proper functions of government.

Adam Smith is most famous for his advocacy of free markets. What’s less known is that Smith saw an important role for government in society, albeit he thought that government should be limited. In his most famous work, The Wealth of Nations, Adam Smith explains that there are three legitimate functions which should be performed by the government:

The first duty of the sovereign, that of protecting the society from the violence and invasion of other independent societies, can be performed only by means of a military force. But the expense both of preparing this military force in time of peace, and of employing it in time of war, is very different in the different states of society, in the different periods of improvement. (WN, book V, chap. 1, part 1).

This one is straight forward and save for a bunch of cranky anarchists, most people agree with it.

The second duty of the sovereign, that of protecting, as far as possible, every member of the society from the injustice or oppression of every other member of it, or the duty of establishing an exact administration of justice, requires two very different degrees of expense in the different periods of society. (WN, book V, chap. 1, part 2).

This one is also almost universally accepted.

The third and last duty of the sovereign or commonwealth, is that of erecting and maintaining those public institutions and those public works, which though they may be in the highest degree advantageous to a great society, are, however, of such a nature, that the profit could never repay the expense to any individual, or small number of individuals; and which it, therefore, cannot be expected that any individual, or small number of individuals, should erect or maintain. The performance of this duty requires, too, very different degrees of expense in the different periods of society. (WN, book V, chap. 1, part 3).

Most “trouble” in interpreting Smith arises from the third duty of government. However, Smith describes several examples of these functions in the remainder of this section. In fact he acknowledges three categories: 1) infrastructure, 2) education of the youth and 3) education to people of all ages. Following the reasoning of The wealth of nations we can be quite certain that Smith would have endorsed some kind of universal healthcare system.

However, this doesn’t necessarily means that above functions should be delivered for free by the state. Smith suggests that the authorities should be able to ask a (small) contribution from those who benefit from these actions.

References:

http://plato.stanford.edu/entries/smith-moral-political/#SmiPol, visited at April 6, 2013

Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations. Project Gutenberg, 2013. (Visited at April 6, 2013).

See also:

The Principles of Classical Republicanism

Principles for Public Policy

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