Introduction

‘The progressive state’, said Adam Smith, ‘is in reality the cheerful and the hearty state to all the different orders of society. The stationary is dull; the declining melancholy.’1 But how was this most favourable state to be achieved? Here, his prescription was somewhat obscure, even self-contradictory. In part, it was a matter of leaving it to the ‘invisible hand’ — that is, to every man to mind his own business. Authority to control such affairs could not safely be entrusted to any government, and ‘would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to excercise it.’2 Smith cited China as an example of a country that had achieved the stationary state and acquired the full complement of riches consistent with the nature of its laws and institutions, where ‘the oppression of the poor must establish the monopoly of the rich, who, by engrossing the whole trade to themselves, will be able to make very large profits.’ But in the ultimate stage of opulence, from which a country could advance no further, both the wages of labour and the profits of stock would probably be very low.3