There is an interesting review in the New Republic of one of the new Adam Smith biographies (no, not Jim Otteson’s new one, which I’m looking forward to reading). I quite appreciated this part of the review:
By turning the logic of mercantilist economics on its head and establishing a market designed for the good of the common citizen, Smith believed governments could both unleash immense productivity and wealth and create economic institutions that encouraged discipline, moderation, and order in an open society. This would mean drawing a clear distinction between “pro-market” economic policy and “pro-business” economic policy, and Smith believed there were few threats to the moral order of a liberal society greater than the entanglement of the government with the nation’s largest producers.
That distinction has been lost in our time. In recent decades, the federal government has too often sought to advance the nation’s economic interests by tying itself to our largest corporations. What the left derides as crony capitalism and the right derides as state capitalism has been the policy of Republican and Democratic administrations alike, particularly since the economic crisis of 2008. The Bush administration’s bailouts of large Wall Street firms and the joint Bush-Obama bailouts of the nation’s largest automakers were the epitome of such entanglement. And the Obama administration’s economic reforms—empowering the largest health insurers over smaller competitors in last year’s health-care reform and the largest financial companies over smaller competitors in last year’s financial regulation reform—have taken this approach to new heights.
It was no surprise that those large insurers and financial firms supported those reforms, even though they increased the government’s power over the companies’ operations. As Smith understood, the wealthy and powerful will always look for exemptions from the rigors of competition. Though he was a champion of free markets, Smith was no fan of big business. Large merchants and principals of “joint stock companies” (or corporations), Smith wrote, are “an order of men whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it.” And they are more than happy to use the government as their instrument.
However, without having read the book itself (and I’d love to find the time to read two biographies of Smith), I’m not sure how much is new on key questions like “The Adam Smith Problem” given Jim’s excellent treatment of it in Adam Smith’s Marketplace of Life (published by Cambridge University Press). Unfortunately, Levin shows no sign of familiarity with Jim’s book despite his praise of Phillipson’s argument that The Wealth of Nations and The Theory of Moral Sentiment are connected rather than at odds (something Jim handled skillfully more than a decade before Phillipson’s book [and strangely Jim’s well-known work on Smith doesn’t merit an inclusion in Phillipson’s index, though I can’t tell on Amazon if Jim’s work is cited in the text]).