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I. Introduction
Using Adam Smith's doctrine of invisible hand, or the elegance of modern general equilibrium analysis, supporters of unfettered free market capitalism have always viewed free market/laissez-faire capitalism (which Smith called commercial society) as a smooth, efficient, and harmonious system leading to public interest, and one which is capable of self-correction, requiring no government intervention. Proponents of free market capitalism, claiming Adam as their champion, assume that free market outcomes, which they view as always efficient, should not be viewed as unjust. In their view, we should always accept such outcomes as just so long as they are arrived at voluntarily. However, as discussed in the last section, Smith, being a moral egalitarian, was concerned with justice, believing that free market capitalism (i.e. commercial society) will lead to both efficiency as well as just outcomes for every market participant. Smith, being concerned with just market outcomes, could in no way have agreed with Milton Friedman's assertion that profit maximizing firms should not be concerned with just market outcomes. As argued in the last section, Smith's support for free market capitalism did not imply that he did not care for justice and ethical behavior on the part of market participants. On the contrary, his belief was that the market would lead to the best of human behavior. As also argued by Albert Hirschman (JEL, 1982), Adam Smith inherited the almost universal belief among earlier eighteenth century European writers - the likes of Montesquieu, James Steuart, and William Robertson - that commerce and industry (that what we have called capitalism since Marx) is a powerful moralizing agent which brings many non-material improvements to society. According to Adam Smith and many other eighteenth century writers, the Smithian commercial society (i.e. free market capitalism) would lead to:
A more polished human race - more honest, reliable, orderly, and disciplined, as well as more friendly and helpful [... ] (Albert [18] Hirschman, 1982).
In the words of Samuel Ricard, another eighteenth century thinker:
Through commerce, man learns to deliberate, to be honest, to acquire manners, to be prudent in both thought and action. Sensing the necessity to be wise and honest in order to succeed, he flees vice, or at least his demeanor exhibits decency and [... ]...