Adam Smith and Robert Higgs: Essentials for Understanding Today's Retarded Recovery
In the Quote of the Day at Café Hayek, Don Boudreaux highlights Adam Smith Book II, Chapter 1 – on pages 284-285, Vol. 1, of the 1981 Liberty Fund edition – of Adam Smith’s 1776 An Inquiry Into the Nature and Causes of the Wealth of Nations in a quote that shows an explicit understanding of what Robert Higgs has labeled Regime Uncertainty, one of the major factors currently retarding economic recovery.
From Don’s commentary:
In modern commercial economies, enterprising people who are “continually afraid of the violence of their superiors” are victims of what Bob Higgs calls “regime uncertainty.” In response, of course, these people don’t literally bury their wealth as they would have done in more primitive times and as they likely do still in more primitive societies. Instead, they refuse to invest (or they invest much less than they would were their property, and their claims to the fruits of the productive uses of their property, more secure). Enterprise shrinks. Economies stagnate. And the consequent reduction in spending is mistakenly accused of being the cause of these economic woes rather than recognized for what it is: a symptom of a deeper, more ‘real’ problem.
The whole thing is well worth reading and sharing: