Why would Adam Smith, the father of modern economics, be appalled -- like any sane observer -- by the arrest and incarceration, albeit for a short period, of Nusraat Faria? Because for Smith, the foundation of a prosperous economy lies in the presence of a just and effective government.
What many non-specialists may not know is that long before the publication of his seminal work The Wealth of Nations (1776), Smith delivered a series of lectures at the University of Glasgow, later compiled as Lectures on Jurisprudence (c. 1762–1764). In these lectures, he explored the principles of law, governance, property, and the evolution of civil society. Smith advocated for a government that is limited in scope but firm in its commitment to justice. Such a government, in his view, would never engage in arbitrary detentions -- least of all the arrest of an artist on spurious charges.
The chief purpose of government, according to Smith, is to preserve justice, and the object of justice is security from injury. The state must protect the individual’s right to their person, property, reputation, and social relations. It can be said without any hesitation that moral philosophy, legal theory, and political economy were deeply interconnected in his thinking.
Bangladesh needs foreign investment as well as domestic investment. To attract foreign investment and spur economic growth in Bangladesh, Smith would advocate for the following key policies and conditions:
Rule of law: Adam Smith would like to see a predictable legal system that enforces contracts fairly. Corruption and arbitrary state intervention deter investment, so Smith would favor transparent and impartial institutions.
Effective governance: While Smith opposed excessive state intervention, he recognized the need for the government to provide public goods like infrastructure (roads, ports), education, and security -- all of which attract investment. Efficient taxation (not overly burdensome) and minimal bureaucratic red tape would be crucial.
Secure property rights: Smith believed that economic growth depends on individuals having confidence that their investments and property are safe from arbitrary seizure or burning down to the ground, or unnecessary government interventions. For Smith, clear and enforceable legal protections for both domestic and foreign investors would encourage long-term capital inflows.
Smith recommended a competitive business environment, where foreign and domestic firms operate on a level playing field, would maximize productivity.
Sociologists often emphasize that Adam Smith should not be celebrated solely for his contributions to economics. His earlier work, The Theory of Moral Sentiments (1759) -- written 17 years before The Wealth of Nations -- is also a significant contribution to sociological thought. In it, Smith underscored the importance of morality and sympathy in shaping human behaviour within society. He laid the groundwork for an argument now widely accepted by many economists: That trust and ethical norms are essential to the functioning of markets. A nation perceived as hospitable and fair to foreign businesses is more likely to attract investment.
Giovanni Arrighi’s Adam Smith in Beijing (2007) explores the rise of China as a global economic power through the lens of Adam Smith’s theories, particularly those in The Wealth of Nations.
Arrighi contrasts China’s development model (state-guided capitalism, high savings, and gradual market reforms) with Western neoliberalism. This is where Arrighi adds his own interpretation suggesting that China’s growth aligns with Smith’s ideas of market-driven development, but with a strong state role -- different from Anglo-American capitalism.
China's leadership pursues market-driven growth not out of ideological commitment to capitalism, but as a pragmatic means to enhance efficiency. It has not abandoned socialism, but has recognized -- through costly experience -- the limitations of a state-led command economy.
Many so-called Marxists blinded by their narrow ideology fail to see the difference between “market” and “capitalism.” Bangladesh is better advised to embrace the market and work towards market efficiency rather than embracing Anglo-American capitalism as a matter of faith.
In a neo-liberal world there is only an economy and “no society” as the late Margaret Thatcher, the former British Prime Minister famously declared. Taking Smith as a whole, many economists now strongly argue that the market is embedded in society. And society is the opposite of chaos, the polar opposite of mob rule. A market-friendly state must begin with the construction and reconstruction of society first. What happened to sympathy and morality which lay the basis of decent society?
Historian and philosopher Yuval Noah Harari made an interesting distinction between democracy and dictatorship. Democracy thrives on trust. Dictatorships thrive on fear. When trust erodes -- when people no longer believe in elections, institutions, or truth itself -- democracy collapses. Fear is the currency of autocracy.
It is appalling to see that men and women in powerful positions remain indifferent to false charges and trumped up lawsuits
People are fearful of institutions of the government -- say, police, against arbitrary arrest. Newspaper editors and owners are afraid of mobs. Citizens are fearful of arbitrary arrests.
Falsehood cannot be the basis of a good society, less so of a market. The two Ts: Trust and truth go together.
It is appalling to see that men and women in powerful positions remain indifferent to false charges and trumped up lawsuits which make a mockery of the institutions of law and justice.
If you fail to defend the truth, you can not create a just and orderly society, the very basis of an efficient market economy.
Habibul Haque Khondker is a sociologist and columnist.
