Adam Smith calls for doubling of the size of govt: Shock

public-works-desk-001.gifWould Adam Smith please come to reception. Adam Smith

Google Alerts have many things to answer for – in particular you can’t name anyone without them turning up to your site in seconds answering your charges. Gavin Kennedy (I am convinced) gets Google Alerts every day on where and when Adam Smith’s name has been invoked. He may be reading these words as you read them, if he’s not done so already. It is all grist for the excellent mill he runs at Adam Smith’s Lost Legacy – the blog of the excellent book of the same name.

In response to Gus Hurwitz making some comments on a blog claiming that Adam Smith hadn’t been very expansive on the role of governments, Gavin had the Adam Smith response squad on the scene with in minutes and thence it was picked up by economics uberblogger Brad De Long. Gavin had this to say.

Adam Smith mentioned many examples of “public works and public institutions,” corresponding to a substantial expenditure of tax payer’s taxation, far greater than is normally supposed by fast readers…. “1ood road2, bridges, navigable canals, harbours, &c…. Turning to the public institutions, the agenda was even bigger… private co-partneries and Royal Charter joint stock companies, institutions under which companies exercised their functions, regulated by laws. It has a long section of the institutions for the education of youth, bringing into the frame the education of children through to university. To carry our Smith’s recommendations would involve schools in every parish, plus teaching staff, and reform of the universities on the Glasgow model… public health measures… a long discourse on religious reform… the expense of government, no mean loose change operation in any country. What was the prerogative of sovereigns became the “dignity of governments” and, as a necessary public institution, its buildings and furnishings were appropriate charges on the public purse. Gus should look a little closer at Book V to counter-act his impressions as they stand at present. But congratulations for actually reading the book…

In any event as I’ve waded through these pages in the past it has struck me that in Smith’s day government was a very slender beast indeed taking up a few percentage points of GDP though it rose a fair bit when there was (as there so often was) an important war on. In my ignorance I would imagine that Smith’s proposals would involve at least doubling government peacetime expenditures. Not bad for someone who is today regarded as a champion of small government. Then again of course it all depends where you start. You could fund all the things Smith wants to fund and halve the size of government and halve it again from where it is today. Somehow though I doubt Smith would be too hostile to the welfare state today (which is what’s driven the size of government). But that is of course pure speculation.

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