Beyond free trade: Adam Smith on slavery and implications for American capitalism

Contemporary invocations of Adam Smith in policy debates frequently overlook his opposition to slavery and discriminatory institutions. This paper examines how Smith’s integrated economic and moral critique of slavery provides a framework for analyzing current debates over racial equity, particularly regarding diversity, equity, and inclusion (DEI) programs and affirmative action in higher education. Smith argued that discriminatory institutions fundamentally undermined “perfect liberty” and market prosperity. The analysis reveals a “paradox of selective intervention” where government action to address racial inequalities faces resistance while interventions perpetuating existing hierarchies remain unchallenged. A genuinely Smithian approach would recognize addressing systemic racial inequality as both moral imperative and economic necessity for inclusive prosperity.