Economic liberalism

Arguments in favor of economic liberalism were advanced by Smith and others during the age of enlightenment, opposing feudalism and mercantilism.

[2] It was first analyzed by Adam Smith in An Inquiry into the Nature and Causes of the Wealth of Nations (1776), which advocated minimal interference of government in a market economy, although it did not necessarily oppose the state's provision of basic public goods.

[7] In Smith's view, if everyone is left to his own economic devices instead of being controlled by the state, the result would be a harmonious and more equal society of ever-increasing prosperity.

[8] The early theory of economic liberalism was based on the assumption that the economic actions of individuals are largely based on self-interest (invisible hand) and that allowing them to act without any restrictions will produce the best results for everyone (spontaneous order), provided that at least minimum standards of public information and justice exist, so that no one is allowed to coerce, steal, or commit fraud, and there should be freedom of speech and press.

[9] Initially, the economic liberals had to contend with arguments from the supporters of feudal privileges for the wealthy, traditions of the aristocracy and the rights of monarchs to run national economies in their own personal interests.

As subsequent authors picked up and promoted widespread appeal of a subset of Smith's economic theories to support their own work—of free trade, the division of labour, and the principle of individual initiative—this contributed to obscuring other aspects of the rich body of political liberalism to be found in Smith's work.

For example, his work promoted the ideal that the everyday man could hold ownership of his own property and trade, which Smith felt would slowly allow for individuals to take control of their places within society.