Adam Smith and the Follies of Central Planning

James Otteson,

Release Date
June 27, 2012


Basic Economics

Architects create blueprints for buildings; could a person create a blueprint for society? Could such a person choose how many people will be lawyers and how many will be policemen? Adam Smith discusses such a designer in his book The Theory of Moral Sentiments (1759). He calls this person the “man of system,” saying that such man is “apt to be very wise in his own conceit; and is often so enamored with the supposed beauty of his ideal plan of government that he cannot suffer the smallest deviation from any part of it.”
Professor James R. Otteson explains Smith’s man of system. The man of system faces a problem: individual people are not chess pieces to be moved only under someone else’s authority. Individuals make their own decisions and move on their own. When individuals are constantly butting up against demands from the government that they find imposing or contrary to their desires, Smith says, “society must be at all times in the highest degree of disorder.”

I, Pencil (video): An exploration of unplanned, spontaneous order and the invisible hand.