The Market Ideal of Smith and Jefferson

Adam Smith had a brilliant insight. Localized market economies comprised of small buyers and sellers guided by a simple moral code of mutual caring and responsibility can self-organize to the benefit of the community with minimal need for intervention by a central authority. Smith’s ideal was an economy comprised of micro-enterprises in which the owner, manager, and workers are one and the same.

Thomas Jefferson had a vision of a democratic nation built on an economic foundation of independent small farmers and artisans in which wealth and power are equitably shared and there is no division between owner, worker, and managerial classes. Smith and Jefferson both opposed any form of corporate monopoly and would strongly reject the idea that corporations have a right, even an obligation, to amass wealth for their owners and managers beyond concern or accountability for the larger consequences for society.

Modern societies must necessarily organize at a greater scale than the micro enterprises favored by Smith and Jefferson. We can, however, benefit from their essential insight that the size and ownership of the enterprises that comprise the economy have important implications for the health and well-being of the larger society. The larger the enterprise and the less connected its owners and managers to the community or communities in which it is located and does business, the more likely it is to be driven solely by short-term profit.