How did Adam Smith's philosophy of government non-intervention in business impact the United States?

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Adam Smith’s ideas, or at least the general idea that government should not interfere in the private economic sector, had a strong impact in the United States.  While many conservatives in the US believe that the government regulates things too much, the US has a system in which the government is much less involved in the economy than governments typically are in, for example, most European countries.

Adam Smith came up with the idea that an economy should be run by the “invisible hand.”  What this meant is that the government (the visible hand) should not try to control the economy. Instead, the government should allow market forces of supply and demand to determine what happens in the economy.  Whether Americans got this idea from Adam Smith or not, the idea clearly caught on rather strongly in the US.

The US has always been at least somewhat more conservative when it comes to government intervention in the economy.  In the late 1800s and early 1900s, there was very little regulation of any sort.  Even after the role of government expanded after the Great Depression, the US did not go for things like having the government own key industries. Many other countries went in this direction, but the US did not.  Today, the US government continues to stay out of economic decisions more than most developed countries’ governments do.

We can say, then, that Adam Smith’s ideas helped to make the US a more conservative place than many other developed countries.  This has, perhaps, helped make the US economy wealthier, but it may also have created a situation in which Americans are more willing to accept economic inequality than people in other countries are.


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