Adam Smith's Wealth of Nations at 250, with Eamonn Butler

Cody Cook welcomes Eamonn Butler, British economist and co-founder/director of the Adam Smith Institute, for a timely discussion marking the 250th anniversary of Adam Smith's seminal work, An Inquiry into the Nature and Causes of the Wealth of Nations (published March 9, 1776). Butler, author of primers on Hayek, Friedman, and Mises, shares insights from his work studying and promoting the ideas of Adam Smith.

The conversation explores Smith's enduring legacy as the father of modern economics, rooted in the Scottish Enlightenment. Butler explains how The Theory of Moral Sentiments (Smith's earlier work on virtue, sympathy, empathy, and justice) underpins The Wealth of Nations, showing that self-interest in markets—when guided by moral foundations like trust and honesty—produces social harmony via the famous "invisible hand." Rather than benevolence alone, we get our bread from the baker's self-interest, yet this serves society beneficially.

Smith's revolutionary ideas shine through: the division of labor (illustrated by his pin factory example boosting productivity dramatically), national wealth as productive capacity (not hoarded gold), the benefits of free trade, opposition to tariffs, monopolies, and mercantilism (which he saw as cronyism enriching the few at others' expense), and limited government to prevent corruption and rent-seeking.

Butler also addresses common misconceptions: early capitalism Smith opposed slavery not just morally but economically, arguing it stifles incentives and efficiency. He contrasts this with critics like Thomas Carlyle, who dubbed economics the "dismal science" in defense of hierarchy and authoritarianism. The episode tackles modern critiques from both left and "new right," defending self-interest (prudent and long-term) against charges of short-sighted selfishness, and refuting claims that markets idolize materialism or erode meaning—pointing to how prosperity enables philanthropy, education, leisure, and cultural flourishing.

Smith's framework rejects the "man of system" (central planners treating people like chess pieces), favoring emergent order from individual actions under justice. Butler highlights real-world successes: globalization and market liberalization since the 1990s have nearly eradicated extreme poverty for billions, far outperforming decades of socialism.

The discussion ties Smith's ideas to Christian liberty, noting his deistic leanings, regular churchgoing, and emphasis on virtue. It compares the 1776 publications: The Wealth of Nations (providing a blueprint for prosperity and freedom) vs. the Declaration of Independence (asserting independence), with Butler arguing Smith's work has greater long-term impact on liberty.

This episode offers a refreshing, faith-informed defense of free markets, countering cronyism and statism while celebrating Smith's vision of human flourishing through competition, trust, and voluntary exchange. Perfect for libertarians, Christians, and anyone interested in economics' moral foundations—especially timely in 2026.

Links:

The Adam Smith Institute

The Wealth of Nations

The Theory of Moral Sentiments

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