Yes, [[Neo-liberalism]] deviates from the ideas of [[Adam Smith]] in several significant ways, and in some respects, it even runs counter to his principles. Here are a few key points of divergence: ### 1. **Role of the State** - **Adam Smith's View:** While [[Adam Smith]] is often associated with free-market principles, he did not advocate for a completely unregulated market. In *The Wealth of Nations*, Smith outlined several roles for the [[Government]], including national defense, the administration of justice, public works, and institutions that are not profitable but necessary for [[Society]] (e.g., infrastructure). - **Neo-liberalism:** Neo-liberalism, especially in its later 20th-century manifestations, tends to push for minimal government intervention in markets, emphasizing deregulation, privatization, and austerity. This approach often reduces the state's role in areas Smith believed were important for economic stability and fairness, such as public goods and essential services. ### 2. **Monopolies and Market Power** - **Adam Smith's View:** Smith warned against [[Monopolies]] and cartels, arguing that they distorted markets and reduced competition. He was cautious of concentrations of power and was critical of business interests that could collude to raise prices or limit competition. - **Neo-liberalism:** In [[Practice]], neo-liberal policies have sometimes allowed for the consolidation of corporate power, particularly through deregulation. While neo-liberalism promotes competition theoretically, it has sometimes led to large-scale privatizations and monopolistic or oligopolistic markets that would likely have been a concern for Smith. ### 3. **Moral [[Philosophy]] and the Market** - **Adam Smith's View:** Smith’s economic theory was deeply rooted in his moral philosophy. In *The Theory of Moral Sentiments*, he argued that markets should operate within the bounds of ethical behavior, including empathy and fairness. His [[Belief]] in self-interest was tempered by a broader concern for social welfare and the moral responsibility individuals and businesses have toward society. - **Neo-liberalism:** Neo-liberalism tends to focus more on efficiency, profit maximization, and individual liberty in markets, often sidelining concerns about the broader social good. The emphasis is often on self-interest without the moral counterbalance that Smith emphasized. ### 4. **Wealth Inequality** - **Adam Smith's View:** While Smith accepted the existence of inequality, he was critical of extreme wealth disparities and believed that markets should benefit the broader population. He was concerned about the social instability that could arise from a society where wealth and power were concentrated among a few. - **Neo-liberalism:** Neo-liberal policies have often been associated with increasing inequality. Tax cuts, deregulation, and reduced welfare programs—core neo-liberal policies—have, in many cases, led to a concentration of wealth among the wealthy, which runs counter to Smith’s concern for the well-being of the broader society. In summary, while both neo-liberalism and Adam Smith share a commitment to the importance of markets, neo-liberalism often takes a more extreme approach to deregulation, state intervention, and market behavior, at times disregarding the moral, social, and competitive concerns that Smith embedded in his economic philosophy. ![[AdamSmithEnglishversion.pdf]]