Adam Smith Was Wrong About This

Adam Smith Was Wrong About This by Jason Kuznicki, Foundation For Economic Education

Sometimes Adam Smith is wrong. Here’s one of those times. In Book I, Chapter 2 of the Wealth of Nations, Smith writes:

This division of labour, from which so many advantages are derived, is not originally the effect of any human wisdom, which foresees and intends that general opulence to which it gives occasion. It is the necessary, though very slow and gradual, consequence of a certain propensity in human nature which has in view no such extensive utility; the propensity to truck, barter, and exchange one thing for another.

But humans do not have a “natural propensity to truck, barter, and trade.” Worse, having such a...