THUS eNDED hISTORY:
Adam Smith’s Moral Authority (Daniel Klein, 3/09/26, Law & Liberty)
Shortly after The Wealth of Nations appeared, the rate of economic growth and living standards in the Western world shot up dramatically. In charts of per capita wealth or GDP, spanning hundreds of years, we see a long history of flatness and then a striking acceleration beginning around the time of Smith’s death, as though his work caused the change. Economist Deirdre McCloskey calls it “The Great Enrichment.” The shape of the curve has been called “the hockey stick,” with the blade of the hockey stick representing the past 250 years of remarkable enrichment. […]
First, Smith taught that when someone honestly pursues income, his activity most likely contributes to the good of society. Thus, Smith morally authorized the pursuit of honest income. Smith told people, in effect, that when you get up early and work hard in the quest for honest income, God approves. The same notion was rising in sermons of clerics and in other writers, but The Wealth of Nations expounded the notion in a remarkably impressive and even imposing way.
You are morally authorized to take care of your part of society because that is where your efforts are most effective in advancing the good of the whole.
Smith’s book of 1776 taught that, in pursuing honest income, you are not only innocent but even presumptively virtuous. The moral authorization of the pursuit of honest income lent vigor to economic life. Not only did people get up early and work hard in their calling, but it also invigorated innovation. One way to earn an honest income is to come up with new goods and services, and new ways of producing goods and services. Because honest income was morally authorized, people were emboldened to step out of traditional occupational grooves, to innovate in whatever way, provided that it was honest.
By giving the green light to honest income, Smith invigorated innovation, and that is essential for The Great Enrichment.
The second great moral authorization was directed to the policymakers. Smith morally authorized them to support policies that allow people to pursue honest income.
Smith morally authorized a presumption in favor of “allowing every man to pursue his own interest his own way.” That would mean not restricting ownership rights and the freedom of association or contract. It would mean liberalizing restrictions.

