Adam Smith and Just Efficiency

Adam Smith envisions an economic order which is primarily just, and that happens to be efficient. His proposal mainly attends to the fact that the rules that govern relations between people are fair, that they respect the freedom and equality of people, and a secondary effect of their institutionalization is that, in addition to being fair, they also turn out to be the most efficient. Indeed, for Smith, just and efficient rules are at the base of the prosperity of a commercial society. A commercial society is the most fertile environment to promote freedom and equality, which are the base of human and economic flourishing. A commercial society creates prosperity, increasing life expectancy, and decreases hardship. It favors friendly interactions and exchange of sentiments, thus allowing the virtue of humanity to develop. It exposes people to strangers, enlarging their perspectives and thus decreasing their self-centric biases. Furthermore, commercial societies are based on economic exchanges, which intrinsically recognize equal dignity among individuals. On the other hand, pre-commercial societies tend to generate potentially de-humanizing "servile dependency" and poverty that threaten human and economic growth. The hardship of pre-commercial societies is such to make suffering and death common, hardening people and thus inhibiting the expression of sentiments, and limiting mutual sympathy. Smith also warns of the dangers to which a commercial society is exposed, dangers which can impede the realization of justice and freedom, and consequently of efficiency. He condemns policies that retard economic growth because they fail to promote equality by benefiting some at the expense of others. They are unjust and also inefficient