Saturday, August 22, 2026

Adam Smith’s Warning for America’s New Socialists

By Mark Jamison

Wednesday, August 19, 2026

 

Socialism has acquired an appeal that few would have imagined a decade ago. Bernie Sanders’s near success as a presidential candidate seemed like a one-off. But now, self-declared socialists are winning elections.

 

The appeal isn’t surprising. Americans are experiencing anxieties about housing, health care, the economy, and technology. Some feel helpless. Socialists offer a deceptively simple explanation: Powerful corporations and wealthy Americans have rigged the system. And they offer equally simple solutions: Take power from the powerful, take their money, and use government to give people what they want. It’s a hero’s journey worthy of Hollywood.

 

But the interesting question isn’t why socialism has gained momentum, but what kind of world it assumes: Are prosperity and comfort things government can design from above? Or do they emerge only when people have the freedom to choose and pursue their own ambitions?

 

Adam Smith warned us about visions of top-down prosperity over 250 years ago. In The Theory of Moral Sentiments, Smith called the would-be planner a “man of system”: someone so confident in his own wisdom and design for society that he forgets that the people he proposes to direct have their own minds and purposes. They respond well to incentives, but not to dictates.

 

Sadly, today’s progressives fail to see themselves in Smith’s words. Consider Michigan Democratic U.S. Senate nominee Abdul El-Sayed, who recently declared himself a capitalist and invoked Adam Smith to explain why. His Smith is chiefly an enemy of monopoly: Concentrated businesses exploit workers and consumers, requiring governments to restrain them.

 

El-Sayed isn’t wrong that Smith distrusted businesses that collude and secure government favors. But he misses Smith’s larger insight spelled out in The Wealth of Nations: Prosperity depends on liberty and on institutions that allow both ordinary and extraordinary people to pursue ideas and plans of their own making.

 

In his inquiry, Smith finds that economic freedom coordinates the actions of people who don’t share the same objectives. In Smith’s telling, the baker wants income. The customer wants bread. The employee wants wages. The entrepreneur wants to build something. The investor wants a return. There is no need for an overseer to direct them. Acting freely, their different purposes and personal energies create cooperation.

 

Smith’s insight was not about virtue. In a sense, it was almost the opposite: People with different purposes are incentivized to benefit each other when everyone is at liberty to choose.

 

Socialism does the opposite. Instead of allowing millions of people to direct their lives — and in doing so, coordinate their lives — political actors decide what is to be produced, who’s to produce it, and who’s allowed to buy it and at what cost. The mechanism is coercion, not cooperation.

 

Smith discovered that a successful commercial society requires three things: security, the rule of law, and economic liberty. People need to be secure in their person and their property, protected from criminals, from dishonest businessmen and customers that would break contracts, and from officials that take property. These basics depend on limited government and an independent and non-corrupt judiciary, following a system of laws designed to protect liberty, not favor one person or group over another.

 

Today’s socialist leaning political actors want to undermine these fundamentals. Their public statements spell it out, calling for large and essential businesses to be owned or controlled by the government or labor unions. The leaders fail to say what becomes of the life savings of people who have invested in or built the businesses that suddenly serve political and labor union interests.

 

Their political leaders also want to undercut the rule of law by politicizing courts. Most extreme is the DSA’s proposal to make courts “subordinate to Congress,” rather than being a third branch of government. Legal cases would be decided based on political connections, not laws, precedent, and specific facts. Contracts, whether for labor or business, would mean nothing. Proposals such as term limits, congressional oversight of ethics, and court packing are less extreme, but they are steps in the same direction.

 

This is Smith’s man of system at work. “Very wise in his own conceit . . . [the planner] seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chessboard,” believing that people “have no other principle of motion besides that which the hand impresses upon them.” Housing costs too much? Just mandate lower rents. Health care costs too much? Make it a human right.

 

But ignoring economic realities doesn’t make them go away. Farmers choose what to grow based on what food processors want to buy. The processors make their choices based on what distributors and retailers seek. And these are ultimately competing for consumers. Every socialist experiment has shown that when government chokes these economic incentives, businesses and laborers work less and consumers do without. As Smith explained, the pieces on the economic chessboard move themselves.

 

The socialist error isn’t in wanting people to have good lives, but in believing too much in their man of system’s visions and abilities. The problem isn’t confined to the socialist left. Much of today’s populist right has accepted the same premise: When economic outcomes disappoint, politicians should rearrange them.

 

Americans aren’t chess pieces. We have ambitions and visions for our families’ and communities’ futures. Sometimes we choose wrongly. But it is only through protecting and exercising liberty that we find the right ways.

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