“Much of Book 3 is dedicated to a historical account of how and why the feudal order that prevailed throughout Europe for many centuries eventually gave way to a liberal, commercial order—that is, how a world dominated by hierarchy, dependence, and intrastate conflict was superseded by one in which the rule of law reigned and people enjoyed comparative freedom and safety. Smith’s account of how the feudal lords squandered their immense power for the sake of frivolous luxuries has become a famous one.”

If I were asked to name the single most important passage in Adam Smith’s corpus, my nominee would be the climactic claim of Book 3 of The Wealth of Nations: “commerce and manufactures gradually introduced order and good government, and with them, the liberty and security of individuals, among the inhabitants of the country, who had before lived almost in a continual state of war with their neighbours, and of servile dependency on their superiors. This, though it has been the least observed, is by far the most important of all their effects” (WN III.iv.4). Smith is, of course, best known as a defender and promoter of commercial society, and this is his most explicit and emphatic statement about what he saw as so beneficial about this kind of society: the promotion of liberty and security is by far the most important of all of commerce’s effects. In order to understand how exactly commerce helps to promote liberty and security, and why it is so critical that it do so, in Smith’s view, it will be helpful to step back and look at the broader narrative of Book 3.

Much of Book 3 is dedicated to a historical account of how and why the feudal order that prevailed throughout Europe for many centuries eventually gave way to a liberal, commercial order—that is, how a world dominated by hierarchy, dependence, and intrastate conflict was superseded by one in which the rule of law reigned and people enjoyed comparative freedom and safety. Smith’s account of how the feudal lords squandered their immense power for the sake of frivolous luxuries has become a famous one.

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