Adam Smith’s axiom

Adam Smith concludes Part #12 of his 1784 pamphlet (paragraphs 49 to 54 on pp. 45-47) with a series of timeless observations that are worth quoting in full. First and foremost (para. 49), Smith puts his cards on the table: “Consumption is the sole end and purpose of all production; and the interest of the producer ought to be attended to only so far as it may be necessary for promoting that of the consumer.” (Smith 1784, p. 45, my emphasis) In other words, the economy should serve the people who buy goods, not the firms who make goods. Furthermore, Smith elevates this general principle into an economic axiom: “Th[is] maxim is so perfectly self-evident that it would be absurd to attempt to prove it.” (Id.) But in light of his comprehensive survey of Britain’s protectionist laws (see, for example, my previous posts from this week), Smith concludes that “the mercantile system” inverts this “perfectly self-evident” axiom in the most perverse way imaginable. (See the rest of para. 49 as…