Democracy

Adam Smith’s theory of political economy did not begin with the isolated individual but rather the individual who operates to earn the respect of others. Wealth and freedom grew from these relationships and engaging with others to create a free society, or what 20th century philosopher Isaiah Berlin’s would call positive freedom. In the 1970s and ‘80s, the Chicago School abandoned this aspect of freedom in preference of the isolated individual, which in turn produced a weaker concept of freedom, morality, and society that has stifled the cultivation of all three in the United States, writes Maha Rafi Atal.

The connections between Adam Smith’s Wealth of Nations and Theory of Moral Sentiments reveal a much more complicated understanding of how markets work than developed in the common interpretation by the Chicago School of economics or that of its critics. Smith’s political economy based on commerce, sympathy, and competition produced social good but only when complemented and checked by other forces. When not checked, Smith worried about “factions” that produce bad outcomes, write Sandra J. Peart and David M. Levy.

The post-World War II Chicago School of Aaron Director and Milton Friedman reimagined a new (neo) liberalism that treated economic liberties and the free market as the greatest defense of political rights. The government, and democracy, were more often than not barriers to economic liberties. The United States continues to suffer from neoliberalism’s prescriptions, and addressing the concerns of today’s populist movements will mean rediscovering ideas of freedom that the Chicago School denigrated, writes Robert Van Horn.

The Chicago School is often associated with laissez-faire economics that reads into Adam Smith’s philosophy of political economy justifications for self-interest and prudential motivations. However, a careful history of the University of Chicago’s early Economics Department and School of Commerce and Administration reveals a more complicated understanding of how economics and business were to interact with one another and society. The early University of Chicago pursued a program that emphasized that laissez-faire economics and a concern for the public interest were not antagonists but perfectly compatible, writes David Mitch.

Adam Smith and the Founding Fathers envisioned a society in which economic and political freedom, grouped together in the ideology of liberalism, would produce a wealthy, free, and peaceful society. Centuries later, this vision has come to fruition, and F. A. Hayek and Milton Friedman helped elaborate and advance that vision in their economic and philosophical works. The lesson for today’s populist moment is not to abandon these principles, but to continue to pursue them, as it is their imperfect realization, not their imperfect conceptualization, that burdens today’s society, writes Peter Boettke.

Matt Lucky reviews Daron Acemoglu’s “What Happened to Liberal Democracy?: Remaking a Politics of Shared Prosperity,” now out at Penguin Press.

In new research, Luna Bellani, Anselm Hager, and Stephan Maurer examine how the abolition of slavery after the American Civil War affected the political influence of former slaveholders. Despite the blow to their economic standing, former slaveholders maintained their electoral success, and once in office, their influence actually grew.

The Supreme Court's decision in Trump v. Slaughter strips independent agencies of removal protections that made regulatory policy predictable across administrations. In new research, Brian Feinstein and Daniel Hemel find that equity markets assign real value to precisely that kind of insulation.

In new research, Marco Battaglini, Valerio Leone Sciabolazza, Mengwei Lin and Eleonora Patacchini study how the deaths of large donors change candidates’ electoral results and congressional activity in a new measure of donors’ influence in American politics.

ProMarket Managing Editor Andy Shi interviews Virginia Tech Professor Chad Levinson about his forthcoming book, The President's Echo System: How Foreign Policy Is Sold to Americans, out June 2 at Harvard University Press.