The 1st duty of the sovereign is that of protecting the society from the violence and invasion of other independent societies.
The 2nd duty of the sovereign is that of protecting, as far as possible, every member of the society from the injustice or oppression of every other member of it, or the duty of establishing an exact administration of justice.
The 3rd and last duty of the sovereign or commonwealth is that of erecting and maintaining those public institutions and those public works, which, though they may be in the highest degree advantageous to a great society, are, however, of such a nature, that the profit could never repay the expense to any individual or small number of individuals, and which it therefore cannot be expected that any individual or small number of individuals should erect or maintain. ~ Adam Smith
Scottish moral philosopher Adam Smith (1723–1790) is remembered as an apostle of capitalism. His 2nd book, An Inquiry into the Nature and Causes of the Wealth of Nations (1776), earned him everlasting fame and enormous influence. His espoused policies were generally adopted in 19th century Britain.
Smith was not the first to write a systematic treatise on economics. That distinction belongs to Scottish economist James Steuart, who published An Inquiry into the Principles of Political Economy in 1767. Steuart’s book harkened back to the mercantilist era, and so was largely forgotten.
Governments in Smith’s day were wasteful and inefficient, misdirecting resources, with poor taxation practices and stifling regulations on both the economy and society. The major goal of social philosophers at the time was figuring ways to reduce the extent and custom of inept government in all areas.
Smith’s mode of thinking in this regard was conventional. What was exceptional about Smith was his fantastic optimism about the positive consequences of what self-interested individuals could create. Whereas mercantilists regarded a country’s resources as properly serving the state, Smith thought that a nation’s economic engine was fueled through the efforts of individuals, and so these people were the ones who deserved its fruits.
That was just the warm-up. Smith went much further: stepping through the looking glass to ludicrously claim that selfishness was a societal good.
Every individual, by pursuing his own interest, frequently promotes that of the society more effectually than when he really intends to promote it. ~ Adam Smith
This irrationality sanguinely squared the circle for Smith: that unfettered enterprise was the formula for “universal opulence”; a reality never realized anywhere in the nearly 3 centuries since Smith fantasized his economic utopia. Instead, the maturation of capitalism as an exercise in self-interest has witnessed the growth of egregious inequities in every society where it is practiced.
Smith prescribed the role of government as largely limited to protecting property, succoring commerce, and picking up the tab where ‘free’ enterprise faltered, including “the authority of the state regularly employed in the enforcing the payment of debts.”
After the public institutions and public works necessary for the defense of the society, and for the administration of justice, the other works and institutions of this kind are chiefly those for facilitating the commerce of the society, and those for promoting the instruction of the people. ~ Adam Smith