ABSTRACT
The universal character of the equivalence of exchanges enables Smith to construct a system marked by the interdependence of all prices and incomes. Opulence allows us to adhere to the system of “optimism”, i.e. the “optimum” or Leibniz's “best of all possible worlds”. But this “obvious and simple system of natural liberty” runs into difficulties. First, the many departures from “free trade”, the “restraints on the freedom of commerce” required by situations where “it may be advantageous to lay some burden upon foreign, for the encouragement of domestic industry” (Book IV), legitimizing protectionist measures. Secondly, Smith moves away (Book V) from the “naive” philosophy of “spontaneous harmony of interests”, where confidence in the automaticity of equilibrium in a competitive market is absolute (i.e. an omniscient and omnipotent “invisible hand”, opposing any organized collective action). In this way, he moves away from the belief in spontaneous progress that blinds us to the role of the state, since if we believe in unalterable progress,—it's even sacrilegious to touch it—then there is no room for outside intervention.
