Did Adam Smith Attend the Constitutional Convention?

This special episode of Liberty + Leadership features a panel discussion recorded live at the 2026 TFAS Annual Conference in Washington, D.C., centered on the question, “Did Adam Smith Attend the Constitutional Convention?” Moderator Dominic Pino is joined by Anne Bradley and Ted Tucker to explore how the ideas in “The Wealth of Nations” influenced the American founding and continue to shape our understanding of economic freedom today.

Together, they discuss the role of free markets in creating prosperity, the importance of limited government and the rule of law, how Adam Smith’s ideas contrasted with mercantilism and why these principles must be actively taught and defended in each generation. The conversation also examines modern misconceptions about capitalism, the appeal of socialism and the importance of educating young people through experiential learning and civic engagement.

Anne Bradley is the George and Sally Mayer Fellow for Economic Education and vice president of academic affairs at TFAS. Ted Tucker is executive director of the Foundation for Teaching Economics. Dominic Pino is an editorial writer for The Washington Post opinion section.

The Liberty + Leadership Podcast is hosted by TFAS president Roger Ream and produced by Podville Media. If you have a comment or question for the show, please email us at podcast@TFAS.org. To support TFAS and its mission, please visit TFAS.org/support.

Transcript

Welcome And Conference Context

SPEAKER_00 0:01

Welcome to the Liberty and Leadership Podcast, a conversation with TFES alumni, faculty, and friends who are making an impact today. I'm your host, Roger Reed. Today you're listening to a special episode of the Liberty and Leadership Podcast, recorded live at the 2026 TFES Annual Conference in Washington, D.C. This year's conference theme of Developing Courageous Citizens reflects the moment we're in as our nation approaches its 250th anniversary and the responsibility to carry forward the principles of our founding. This episode is from a conference panel of Did Adam Smith attend the Constitutional Convention. The panel features Ann Bradley, Ted Tucker, and Dominic Pino, who are all former guests on the Liberty and Leadership Podcast. Anne Bradley is the George and Sally Meyer Fellow at AFAS and Vice President of Academic Affairs. Ted Tucker is the executive director of the Foundation for Teaching Economics, our high school programs division. And Dominic Pino, the panel's moderator, is an editorial writer for the Washington Post opinion page and has been an active participant in the TFAS programs. Together they will discuss how ideas from the wealth of nations shape the founding of the United States, the role of economic freedom and limited government, and why it's never been more important to educate younger generations about these principles. And now here's Did Adam Smith attend the Constitutional Convention?

Prosperity Through Economic Freedom

SPEAKER_03 1:49

Well, hi there, everybody. Good morning. Thanks for being here. I'm Dominic Kino with the Washington Post. Our question for today is you know, did Adam Smith attend the Constitutional Convention? And the answer to that is no. So we're done. We can go. No, no, no. It's obviously we're talking about in a more figurative sense. Uh, how did Adam Smith's ideas influence the Constitutional Convention? How did they influence the founding of America in general? And to talk about that today, we got two people who are experts in educating young people, especially, about economic ideas and about uh American history. So this is the 250th anniversary of the Declaration of Independence, as we all know. It is also the 250th anniversary of the publication of The Wealth of Nations, which was Adam Smith's masterpiece, really creating the foundation of modern economics. So a big happy birthday to the Wealth of Nations. Talking about that first, we got Ann Bradley. Ann, can you tell us uh a little bit more about Adam Smith as the first development economist?

Teaching Liberty To Each Generation

SPEAKER_01 2:49

Yes, sure. Well, good morning, everyone. It's a pleasure to be here. And I just like you to know that on Monday night I brought a cake to my class to celebrate the birthday of the Wealth of Nations. So this is one way you can get students excited about these ideas, which bring them cake. But it is a remarkable thing for me to think about that, you know, it was published in 1776, but in the mid-1760s, Adam Smith, a moral philosopher, really became the first development economist. He wasn't known as an economist. We didn't really have that job title in 1776 or 1760. And so it's a remarkable question that he set out to understand an inquiry into the nature and the causes of the wealth of nations. And he did an empirical investigation to try to understand why some nations are rich and some nations are poor. And something we talk about in the classroom is it's a question that remains today. And Adam Smith, I think if he was walking around, would say, you know, gosh, I was right about a lot of things, and would be amazed at the abundance that we have in a country like the United States because of the economic freedom that we benefit from. So I think, you know, some of the things that are profound, profound insights in the wealth of nations that are very influential and were influential on the founding of the United States. And I would say, you know, one point I think we should think about is that the founders believed that the prosperity of the United States was tied to it being a commercial republic. That is a place safe for commerce. Adam Smith knew that people would pursue their own interests, their own self-interest. And what was remarkable about Smith's insights is that by doing so with the right institutions, what we now call economic freedom, our founders didn't use necessarily that phrase. We study it now thanks to Milton Friedman, who started that study 50 years ago. We understand what those institutions are and we can measure them empirically, but think about the language of the founding limited government, private property rights, limited government interference in business. This is what Smith was writing about. It was anti-mercantilist. It was the freedom for individuals to open businesses and serve their community and their society. And I think the profound insight of Smith was that government kind of provides the guardrails for us to do this well, but that we need to have limits on government so that it doesn't become overly involved. Because when it does that, it, you know, builds relationships with businesses that actually harm the interests of the community. So that we actually serve the common good much more profoundly than we could ever desire to do so when we allow the free market to work. And I, you know, this was radical for someone to say at that timeframe. And I think what's radical now is that we still have to defend and fight for these ideas. If you know me, you know I like to talk about, you know, economists talk about the hockey stick of economic growth. So it's a graph that just looks like a hockey stick. So over all of human history, most people lived in grinding poverty. And Adam Smith saw the unlimited potential of human creativity, or what we might call human capital. That human capital needs to be unleashed in the system of free enterprise. And he saw that it was possible. But we need the institutions of economic and political freedom, and that's what our founders were fighting for. And you see the language in the declaration, and you see the language embedded in the Constitution. And so I think that's what we're fighting for and thinking about today. So yes, I agree. In spirit, very much there. Thank you.

SPEAKER_03 6:39

Yeah, but uh, Ted, uh, Anne was saying how we have to keep reteaching these ideas. We know that they work, we've seen that they work, but we have to keep reteaching them. Uh, why is that and how do we do it?

SPEAKER_02 6:49

I work with high school students and high school teachers for the Fund for American Studies, and we know that every generation needs to relearn the ideas of liberty and economic freedom. And the Fund for American Studies, what we do is we work with high school teachers where we bring them to professional development programs around the country. We introduce them to the ideas of Adam Smith as another as well, really to reinforce the ideas of economic freedom. And we'd also do that with high school students. We run econ camps throughout the summer. We run a for about a thousand plus kids. And the idea is that we're trying to, as Milton Friedman once said, we need to educate future leaders on economics. You know, they need to understand economics. But I think he was a really believer that they need to really understand the ideas of economic freedom. For this upcoming summer, to sort of really deal with this civics crisis, or this crisis in civics, is that we've created a new program for high school students and teachers called Civics and Economics in Action. And the idea of the program, one of the key goals, is to bring the ideas of Adam Smith to teachers, to students, and so that they can be used in the classroom. And for our organization, one of the really highlights of what we do is experiential learning. You know, the idea that students are going to learn by doing. And so we have a variety of activities that are fun, engaging, and really the idea is to get the students to internalize the concepts that are being taught. We can talk about Adam Smith all we want, but we've got to be able to teach it. And pedagogy is just so important.

Free Trade Across The States

SPEAKER_03 8:28

Yeah, and um one of the things when we look back at the founding, uh, one of the big advances that was made between the Articles of Confederation and the Constitution was the abolition of trade barriers between the states. This was a crazy idea at the time. It basically created the world's largest free trade zone in history up until that point, which was the Thirteen Colonies, uniting them all as one. The Articles of Confederation let the colonies do all sorts of tariffs and duties on each other, and the Constitution said you're not allowed to do that anymore. That seems like a pretty clear case of taking Adam Smith's ideas seriously by the founding generation, and has been a huge source of prosperity for the United States ever since then. And you look at other countries around the world. I mean, at that time France had a bunch of internal trade barriers and caused a bunch of problems in France leading up to the revolution there. And still today, in Canada, they have trade barriers between the provinces in Canada that cause all sorts of problems. But the founders had the wisdom to shut down that problem before it even got started in 1789. What are some other things that we can look at of the founders taking ideas from Adam Smith, or at least ideas that are consistent with Smith's thinking and putting them into practice?

SPEAKER_01 9:40

I think uh certainly the protection of private property, because you cannot get long-term investment and you can't get prosperity and economic development, economic growth without that thinking towards the long run. And so I think in a society where we don't have the protection of private property rights, which also, by the way, very much limits what the government can do. And so, I mean, I think the founders very much understood the potential of any government towards tyranny, that any government and any, you know, governing officials, no matter how well-intentioned, and I think that's where Smith, you can see Smith as well, because he very much understood the human person. And so any person will have that potential to abuse power. And so the constraints that are kind of written into the founding documents and the protection of private property, the separation of power, the protection of contracts, the fulfillment of contracts. Again, you're not going to get development, business creation, which again is part of that what I was talking about before, that unleashing of human capital. I think it's a the tragedy today in the world is that there are countries that are still poor. When you think about what Adam Smith was writing about, everybody was poor in 1776. Even Adam Smith, by our standards, who was an elite, kind of wealthy person of his time. So today, the fact that we kind of know how to be wealthy, yet there are countries that still exist by our standards and grinding poverty is a tragedy that can be solved, but it needs the right institutions. And I think other countries can learn from the documents and the wisdom of our founders.

SPEAKER_02 11:14

I would just add the contract clause and the rule of law probably is so key. What makes our country so successful is the embracing of the institutions of capitalism, rule of law, open markets. I mean, those are things that are just so important. And the contract clause, the commerce clause were all great pieces in that document that really have contributed to the wealth that we have.

SPEAKER_03 11:38

One of the things that people on the left might say contributes to wealth is colonialism, a history of colonialism, that this has uh allowed some countries to benefit at the expense of others. And Smith talked about colonialism in the last part of Wealth of Nations. He's obviously writing from a British perspective, not the American one, but he was talking about the American colonies. And he made the point, like, actually, this is losing money. This is not a good way for Britain to make money. It would be better off. Britain would be better off if they just let the American colonies go. And he was writing that in 1776. Obviously, the American colonies also had something to say about that and did in fact go uh soon after that. What do you think about the durability of these ideas that Smith was already saying were wrong in 1776? Why do these ideas stick around?

SPEAKER_01 12:21

I guess one reason is that just maybe that attractiveness of power, and that sounds really good if you're the one kind of in charge, and you know, you get to tell other people what to do, which of course is really good if you're the one that's telling other people what to do. But I think what Adam Smith is helping us understand is that if you free up the market, everyone is better off. Which I think on the left, the argument against capitalism, right, is that you know it's kind of like the anti-billionaire, the anti-rich type of thing, is that it's as very much, and I again I think Adam Smith understood this, and the founders understood this. In a market economy, you're opening up positive sum games. And all of human history was dominated by negative and zero sum games, which is if I win, it's because I'm taking from you. So that's the colonial idea. It's I'm taking from you and I'm better off and you're worse off, and we have plunder and we have violence and we have all sorts of terrible things, and we don't have these robust institutions. And so it takes Adam Smith to say, you know, what's gonna change that is these institutions, and everyone will be better off. So I think it's not even just the, you know, kind of these ideas about colonialism, but even in our own country about kind of are the rich bad by definition, because if you view the world as a fixed pie, then you are gonna believe that. But Adam Smith showed us that opulence is unlimited. And again, I'm just overwhelmed that somebody could write that in 1776. It is remarkable to me. And we should be, you know, let's read that again and let's think about that because it's true today, but we don't believe it. We believe that trillionaires or billionaires shouldn't exist because there's just like a fixed pie and they're taking it all and there's left rest, you know, available for others. And that's just simply not true. And he showed us that a long time ago.

SPEAKER_03 14:08

Yeah, and to your point, it was actually more true when he was writing it than it is now, right? Like it was true historically that a lot of times if the only way to get rich was through violence. It was through taking stuff from other people, it was through conquering land and conquering territory and taking the resources. But what commercial society allows us to do is allows us all to become better off without taking from from one another. Uh, we make each other richer. Yeah.

SPEAKER_02 14:32

And I think Smith was really against special interest groups. I mean, he really wanted an open and free market and really is against state-sponsored monopolies or even government dominance and markets. So by trying to create these open and free markets, he could sort of eliminate that.

SPEAKER_01 14:49

And the poorest societies today, the tragedy is that that's how they live. So they're 100 to 150 years, maybe in the past. And so the way that you get ahead is plunder and violence and becoming a member of the ruling political tribe or class, because that's the best life you can have for yourself. So reforming those institutions is the path to prosperity for individuals across the world. And I think that's the shining light of the American experiment. And so I think that's why we have to absolutely defend these ideas, because if we don't, one thing economics teaches us, and I think we get this from Smith and others in the discipline, there is no such thing as economic destiny. So if we're lazy about these ideas, we will be lazy about our policy and we will lose our freedoms. And so we have to be vigilant about the ideas that inform our policies and our laws and our regulations, et cetera.

SPEAKER_03 15:39

It's I think it's worth emphasizing too how crazy it was for Smith to write a book called The Wealth of Nations in 1776 when all these countries, all these nations were poor. Yeah. Uh that like even Britain, which relatively speaking was wealthy, is extremely poor compared to what we would think of today. You know, Adam Smith is spent most of his life probably within, you know, 10 or 15 miles of the spot he was born in. Uh most people spent their entire life within one or two miles of the spot they were born in. And nowadays, you know, we take it totally for granted that, you know, someone commutes to work uh 20 miles, 50 miles away, uh, and it's just it's just totally normal. And so when Smith is writing, you know, what was the idea before Smith about the wealth of nations? What were people thinking before that? What were these ideas of mercantilism and things like that that Smith was saying were wrong in book four of Wealth of Nations?

SPEAKER_02 16:28

The prevailing view at the time was a country to get wealthy needed to accumulate precious metals like silver, gold. And so they really caused them to emphasize exports versus imports. That's what the colonies were for, right? Manufactured goods from Britain were sent to the colonies, and the colonies provided the kind of the raw materials. But it didn't really look at the people within the country and how they could create their own wealth.

SPEAKER_01 16:53

And I actually think that's why the first sentence of the wealth of nations is about the division of labor. So what he wants to talk about right away is how people become more productive. So that's the secret sauce. If you want a nation to accumulate more wealth, the individual citizens have got to find a way to become more productive. And individuals cannot become more productive on their own. We don't live in isolation, we live in community. And so I think that gets this idea. Mercantilism is kind of isolating, right? It's this idea that we're gonna kind of close ourselves off, we're gonna assume that we can kind of export, but we're not gonna import. And so that kind of forces us to kind of figure out how to produce what we need on our own, which is naturally inefficient, which means we're gonna raise the cost of production, which is gonna limit the division of labor, specialization, and lower our overall productivity. So there's a lot there, but I mean that's the first line. So I think he's on to something very early in the text, which he wants to help us understand, but it is very much a reaction against mercantilism, which he clearly understands is tied to monopoly privilege and what we would today call cronyism. He's very worried about business interests. And, you know, he kind of warns we see businesses kind of near the capital. And they're up to something when the business interests want to have meetings with policymakers, is basically what he's saying. You should be worried about that. And so he kind of understands that protectionism should be very, very limited when it's only absolutely necessary. Otherwise, the market will do what we need it to do.

SPEAKER_03 18:33

Yeah, division of labor is really the consistent theme throughout uh the Wealth of Nations, right? It's this idea that we specialize in things, we get good at them, and then we get so good at them that we're able to then sell our products to other people. You know, before Smith was writing, everyone did every job. Uh you made your own clothes, you grew your own food, you produced uh everything that you needed. You tried to do as much as you could yourself because there wasn't stores to go to, there wasn't places you could go to buy a lot of these things, and you didn't really have money income anyway, uh to buy it with. Uh, people were subsistence farmers. Whereas today we just think it's totally normal that you have a job, you have one job. You do that one thing, you specialize in that, and you buy everything else you need from other people that have jobs that are making those things. So, you know, the suit, I didn't make this, uh I actually bought it uh just down the street from here. And who knows how many people made this suit? There were uh lots of different people involved in in making that, probably from all over the world. And that entire just complete paradigm shift in the way that we think about the nature of work, that is all really recent in human history, right?

Why Government Must Stay Limited

SPEAKER_01 19:39

That one exercise I have my students do in the classroom is to, you know, my my Friday class meets at nine o'clock. So they haven't done that much right before they arrive in the classroom. So I say, okay, I want you to just take five minutes and write down everything you have done from the moment you woke up until you arrived in the classroom. Everything, just five minutes. And and really what you learn quickly is you need more than five minutes because you've done a lot of things. And then we kind of try to talk about okay, what are the and then it's typical stuff like I brush my teeth, and you know, I took a shower and I ate, and I'm like, well, what did you have? And everybody says different things, and some people don't eat breakfast, but yeah, so you're gonna eat sometime today, right? Because you know, your body needs fuel and they say yes, and you had coffee. Anyway, you know, you see where I'm going with this. But they didn't make their clothes, I didn't either. You know, the oatmeal or the avocado, some people have fancy, you know, avocado toast, some people have a donut, you know. No judgment, but you didn't make any of it. Hey, I'm from California. I like avocado toast. I like it too. It's great stuff. No judging, but it's like, what's in a Pop Tart? I don't know. I don't have to know. It's just in the shelf. It's on the shelf, and I can buy it if I want, or if I want to be healthy, you know, I can do other things. So there's millions of people across the world that are decentralized, not communicating, and that stuff is just at the Harris Teeter or the Safeway or wherever you go, and you just give them a little bit of your money. And, you know, it's it seems very simple and it's not. And I think the idea we need to communicate to our students is that there's this whole thing behind that that's very sophisticated and complex. And if we don't appreciate it, we'll destroy it. That's what we need to learn from Smith is that this system is very robust, but if we don't appreciate it and we think we can tinker with it. And so I think one of the lessons of Smith and others that come after him is that the economy is not an engineering project. There are things in the world that are engineering projects, like building this building, but the economy is not one. So, you know, it's that famous iPencil essay. Nobody knows how to make a pencil, and if you tried, we wouldn't have pencils, and let alone an iPhone. So, anyway, I think there's exercises we can do that FTE is doing where we try to deliver these very sophisticated. Messages in a simple way to kind of get some profound messages and lessons.

Crony Capitalism And Regulatory Overreach

SPEAKER_02 22:05

And I think I would just add and maybe change a topic slightly is that you know Adam Smith wasn't like an anarchist. You know, he really did believe that you needed government in some ways. I think we talked about the rule of law already and administration of justice, enforcing contracts. But I think the real key point always is to remember the word limited. You know, he thought government should be small. And when I think about how we're moving forward today, and you just see how large our government is getting, I always think back to Smith and wish and hope that when we're teaching our programs, we're going to be reinforcing that idea that we want a smaller federal government, for example. We don't need all these regulations. You know, I think Ann's already said many times about the importance of the markets and how they can solve a lot of these problems and issues that we deal with.

SPEAKER_03 22:54

Yeah, that that relates to a question we got from the audience about uh, you know, would Adam Smith look at our current economic climate and see crony capitalism instead of actual free markets? And what would he do to course correct today for this oversized uh government?

SPEAKER_01 23:11

You know, the way I try to answer this is looking at the economic freedom data because I think it actually tells us very clearly where we can make improvements. And as you mentioned before, the rule of law, I think that's an area where we need to be very careful. But I also think regulation is one of the areas of how we measure economic freedom is limited government. That's one. So that's an area where I think we need to, you know, Adam Smith would say if government is increasing in both size and scope, then it is crowding out other arenas, both I would say the civil sector, but also the market sector. And then regulation. And so this is kind of runs against kind of what his general principle against mercantilism. And so I think when you look at the regulatory overreach, and the United States is certainly not the only country, of course, that faces this. There's countries that are far worse than us, but I think this is an area where we should be concerned and where we should look for ways to make improvements. And I think a lot of this is on the state and local level. I don't have all the answers, but if you look at housing prices, which is something that a lot of people are concerned about, this tends to be about zoning regulations, and those tend to be at local levels. And I think there are things we can do to change those, but I think it's about kind of getting involved in those types of policies and advocating for change. So I very much think that um we can look at the economic freedom data and help us, you know, kind of go back to the principles of Smith, which is as you said, government should be limited. It has a role, but Smith and the founders knew that it would necessarily try to grow beyond its necessary and limited role. So constraints, the founders understood constraints, right? And they also understood that the constraints would always try to be broken. And so that's part of what, you know, kind of the citizens have to do. And then I think, you know, kind of from my perspective, I think regulation is another area where I think we're going down a road where we need to course correct now.

Why Socialism Appeals To Instincts

SPEAKER_02 25:14

I would just say enroll your students, if you have grandkids, children, in programs like what we offer. I think that everything has to really start at that middle school, high school level of educating our youth. They need to be introduced to these ideas. I'm sure all of you in the audience have had the experience of your student comes home and you cannot believe what the teacher just told them about the importance of or how bad capitalism is. And so I think that being able to equip your students to be able to, you know, counter that kind of thinking is crucial. So, you know, not just programs like what we offer at the Fund for American Studies, but there's other also more conservative organizations out there, but really look for those to supplement your student or grandkid's education.

SPEAKER_03 25:59

Yeah, and uh one of the other questions we got from the audience is is related to this. It's uh, you know, why are the ideas of socialism so attractive compared to capitalism? I have an answer to that. I think Friedrich Hayek had an answer to that, which is that our instincts as humans, because of these ideas of markets and generally growing economy and positive sum games, because of all these ideas are pretty new. Um, it's very natural for humans to still think in terms of zero sum. And it's very uh, you know, that's how our brains are wired. That's how we have developed as people for a long time. And uh it used to be the case for not that long ago uh in the grand history of the world that uh the best way to get ahead was to take money from other people, is to take stuff from other people. And so when we see the government as a tool to do that really effectively at a really large scale, that can be an attractive uh proposition if we don't have the right education and we don't have the right understanding of why that is. You know, Hayek called this the atavism of social justice, um, this idea that this is like a leftover thing in our brain that we haven't gotten past yet. We probably won't for a very long time because of just how slowly those things change uh internally. So, what are some effective ways that you guys have learned about how to communicate to younger people, especially about why some of these ideas are not as attractive as they might seem?

SPEAKER_01 27:19

For me, it's just really trying to teach the economic way of thinking, which is that economics is about human beings and how they make decisions and expected costs versus expected benefits, um, that we're not kind of, you know, homo economicists with Excel spreadsheets in our heads, like you know, and my joke, by the way, is that I just referenced GDP earlier, which we do, but my joke is that when they come to Washington, I'm like, there's a thousand cocktail parties in Washington, DC every night. And you might one time be at a cocktail party where you're stuck in a conversation and you don't know how to get out of it. Just start talking about GDP because nobody cares, nobody's interested, and you can literally make up the numbers. Nobody will know, right? So why do I say that Joe? I say it every semester, and I and I why am I telling you this? Because this is where economics has kind of lost its way. Economics is about humans who have infinite dignity and it's about their flourishing. If you start every class with that, people care. It's about, you know, these kids are gonna graduate with their degrees, they're gonna figure out where they go to college, they're gonna have kids later, they're gonna what do I do? How do I figure out that? That's part of economics. And then the policy and the GDP and trade deficits and all this stuff comes later. It's part of it. But the core of economics is human beings who have dignity, who are limited, who need each other, we're social creatures, and figuring out the institutions that we need. If we start that way and we teach the economic way of thinking, I think we can get them to this because then socialism, which sounds better on paper, it really does. It sounds like they're smart people, we can put them in charge, they care about fairness and equality, and they can again divide up the pie because they kind of know, they can see into the distance, and they can kind of sort it out, there's not going to be corruption, et cetera. It sounds great. But then when you kind of engage them with the economic way of thinking and show that it has never worked, it doesn't work, and it actually creates everything you don't want to have happen, including violence, plunder, tyranny, and the absence of abundance. It takes a long time. You're not gonna do that in one day, but I think it takes, you can do it. And I think you've when you do it with empathy and with an eye towards human flourishing and not just like socialists are stupid and they don't get it, that's not helpful. But when we talk about and we ground it in the human person, I think they get really excited about it. So I like doing that.

SPEAKER_02 29:50

Yeah, we just, for example, we do an activity called the magic of markets, or it's been known as the bag game or the trade game. It's an activity that's probably used, I would say, probably in about 20,000 classrooms around the country. And it's a simple activity that's really designed to show how voluntary trade can create wealth. And it starts with everybody has a brown paper bag, and inside the brown paper bag is some sort of Tchotsky, uh, popery, uh, something very cheap and expensive. And it activity starts out with okay, everybody look inside your bag, and on a scale, it don't show anyone else, and on a scale from one to five, you know, five being the highest, one the lowest, rate your level of satisfaction with that item. And everyone does that. You quickly record it, and the teacher will record it up on a board or on a spreadsheet so everyone can see. And you add them all the scores up, you get a certain score. And then the next round of the activity is, you know, okay, with the surrounding four or five people would that are with you, go ahead and look and exchange, and you can trade within your small group. And so the students do that. And again, then the next question is okay, after you've done your trades, rate your satisfaction with the item that you have. And again, scores are I'll add it up. And then for the final round, okay, now you can trade with everyone in the classroom. So all 40 kids can go and trade. It quickly becomes apparent, you know, once the scores are added up, that in each round, the level of satisfaction gets higher. So by the end of the round, when you can trade with everybody, you're more likely to find an item that you like better than maybe what you started with. And so I think that's a very simple activity that really reinforces the idea that trade can create wealth. And there was nothing new was added to the room. And we really emphasize to the students here. It's not like we've added something or taken away. All we've done is let you have more ability to make exchanges. And it's all voluntary because there's some kids that might have an item at the very beginning that they're not going to trade, and that's important as well. Those kind of activities that are very interactive that are really gonna sort of help reinforce this idea about trade creating wealth, I think are just so important and simple. And as I said, this activity repeated thousands of times, and the results are almost always the same.

Markets As Trust Among Strangers

SPEAKER_03 32:12

That's a great example. And and like you said, that doesn't even take into account economic growth, right? You didn't even add any new products to the room, whereas in real life, uh, we also are increasing the number of options, the number of things available too. Um so just think about how much how much more powerful it is in real life. One of the other questions we got from the audience is about trust and about free markets creating trust. I think one of the things that Anne's talking about earlier, which is we trust certain brands over other brands and things that they have in the store because they develop a reputation and we trust them for quality, for you know, just uh that we like them better than other things. I think that's one form of markets creating trust. But there's also a criticism of markets sometimes that they destroy some kinds of trust because instead of only being around people in your community, you're now interacting with people across the planet, you don't even realize it, and this can be destructive of trust. So, how do we think about markets and trust and maybe alternatives to markets and trust?

SPEAKER_02 33:07

I don't I'm an Amazon shopper, so I'm pretty trustworthy of people everywhere in the world. I I think a lot of it is all comes down to information. Yes, you may order something from Amazon or buy a product that maybe you don't like, but but you can quickly easily, especially nowadays with the power of social media, you can share that information. So collecting information on products or brands is even easier now than it was 20 years ago or 30 years ago.

SPEAKER_01 33:36

I think it's such a great question because I think there's when I think of you know society in general, I think of kind of three main spheres of social life. So, you know, there's the state, government, there's the market, but there's also kind of the Tocquevillian notion of civil society. And I think there's a lot of robust, really amazing things that happen there. The family, your neighborhood, church, nonprofit activities. And so I think there's a lot of trust and friendship and love and those types of things that develop there. So I don't think you outsource all of that to the market. So I think we could overstate what the market is supposed to do. But that said, so you know, kind of the relationship that you have with your next door neighbor. You might kind of, you know, do things for your neighbor and and have a relationship of trust with your neighbor. And that's because of a personal relationship. And Walmart or Amazon, you trust them, but you know, you're not like the Walmart down the street from my house, the person that checks my receipt. I'm not like gonna get invited to that guy's daughter's wedding or something. So, you know, I don't think markets necessarily establish the same types of friendships that you get in other arenas of social life. But what happens with the trust, the anonymous trust of markets is actually very important. Hayek and Friedman believed that this was essential for democracy. Because, you know, what Adam Smith also kind of understood is that you can only know so many people, right? You can only be neighbors with so many people on the street. So there's only like so many cups of sugar that you can lend out because you can only know so many people. So Hayek would actually talk about the market process. He would use the word catalaxy, which means you know, one translation of that word is to bring into the community, that markets bring people into the community. So Amazon is bringing Ted into the Amazon community and the rest of us probably. Now we're not like having a block party together, so it's different, but there's social cohesion and trust that comes from those repeated exchanges. And that Hayek and Friedman would later say that that's why economic freedom is essential for political freedom. You have to have some type of free market economy to have a lasting democracy. And their argument was that this is the the bonds of that social trust among anonymous decentralized people is what gets you the trust you need in a democratic society. So I actually think that's such a great question because we understate that power of markets. But I think we could overstate it too, right? Like I don't love everybody at Amazon. I don't even know them. There's such power in that anonymous trust. So Yeah.

SPEAKER_03 36:21

And who you really don't know as well is the government, right? Uh, you know, you don't know them either. Former uh George Mason professor Walter Williams had a famous example where he talked about um uh talking to members of Congress who were saying that, you know, look, you know, we we care about your children. We want them to succeed. And and and Williams asked them, uh, what's my daughter's name? Like if you care about them, you should at least know their name, right? Um and obviously they don't, because they don't actually know his children, they don't actually care about them in the same way that you would care about them if you're friends with them, right? And I think there's a tendency for people to treat the government, if not the actual government, but the idea of government as their friend and as somebody who's gonna help them and and look out for them. And that wasn't definitely was not how the founding fathers thought about the government, right? Uh uh if you if you read the Declaration of Independence, uh they have a big list of uh reasons that they don't trust the government uh to do those kind of things. And I think there's good historical evidence for that being the case. And this is something that we should be more focused on of uh, you know, why do you trust those guys? Like you were saying, Ann, about how you know on paper socialism, you know, sounds great. We get these experts in, they they look at everything, they divide it up fairly. It's like, have you seen the people in this city? Like, I don't trust these guys to be doing that, right? Like, uh, you know, it's this is not a partisan statement either. I mean, I just I don't trust them at all. And so, yeah, I think the trust in markets, much better track record there of it actually working and making people better off.

SPEAKER_01 37:43

And can I say one more thing on that? I think it's all about incentives, right? So I think the case we have to make against giving the government too many responsibilities is not just it's an efficiency argument, of course, which is what we've been talking about, but it's always about incentives. So what you were just saying, Dominic, is a the government can only do things through bureaucracy. That's it. It's not a market firm that operates on profit and loss. It's and this is true whether it's the North Korean government or the United States. Anytime any government wants to do anything, bureaucracy. So bureaucracies have to treat its kind of customers, if you will, as generic people. And, you know, Chick-fil-A or Starbucks doesn't do that. So that's the incentives part. If Starbucks gives me a latte that's like too cold or, you know, they messed it up, they care about that even though they don't know me. So if I go back and I say this is not what I ordered, it's not what I want, what are they gonna do? They're gonna repair that because even though they don't know me, maybe I never go to that Starbucks. They don't want to lose my business, they don't want me to go to social media and say this Starbucks is terrible, et cetera, because of profit and loss, not because there's good people running Starbucks and there's bad people running the Department of Education. It's not about the people. That's a Smith insight. The people are the people, it's always about the incentives. And so that's why kind of the idea the founders had is they knew that. So we have to kind of think about limiting bureaucracy as much as possible because it's all a story of incentives all the way down.

SPEAKER_03 39:11

And furthermore, in you know, in the private sector, there's there's always the choice to not care about your customers, but then you go out of business. Then you go out of business. Government never goes out of business. Right.

Read Smith And Defend Freedom

SPEAKER_02 39:20

One of the other goals we talked about our new Civics and Economics in Action program for students and teachers is really to combat this belief that I think young voters have that first public servants are selfless. Public servants that are elected, they respond to incentives predictably just like everyone else does in the private market. And then I think as important is fighting the idea that I think a lot of young voters tend to think that you know government programs or you know public goods are different than private goods. And I think the same cost-benefit analysis, the same opportunity costs that get us applied to the private sector needs to be applied to you know government and government programs and bureaucracies as well. I think that's a very key thing that young voters really need to understand and learn.

SPEAKER_03 40:08

We only have a little bit of time left. What are some closing things to think about for the 250th of America and of the Wealth of Nations and how Adam Smith can influence our thinking going forward as we continue to work uh within the Constitution that was created uh back in those times?

SPEAKER_01 40:27

Aaron Powell I think, you know, it's never too late to start reading Adam Smith. Even if you just read the first four chapters of book one, it's very rich, you know, no pun intended, I guess. Um but I I think if you read that alongside the Declaration, is it a very valuable exercise because you will see some of the deep insights of Smith in terms of his ideas about the wealth generation. And I guess I would go back to one more thing and say something I said at the beginning. We have to understand wealth. Wealth has causes. Poverty was the starting point. And so when you think about the exponential economic growth and wealth that we live in today, especially if you're born in a country like the United States, it's very easy to take it for granted. It's very easy to think that it's always been like this and it will always be like this. And that's not the case. So we have to kind of defend these institutions of economic and political freedom and understand where they come from. That will also allow us to be good humanitarians in the world through free trade and other means. And so I think that's you know kind of why we celebrate the 250th anniversary of both of these documents.

SPEAKER_02 41:39

I agree with everything you just said.

SPEAKER_01 41:43

I love that.

SPEAKER_03 41:43

All right. Wonderful. Well, uh, thanks so much for your time and uh and thanks for this great conversation.

SPEAKER_01 41:48

Thank you.

SPEAKER_00 41:50

That was Ann Bradley, Ted Tucker, and Dominic Pino. It's a reminder that the ideas we often take for granted, free markets, limited government, and the rule of law did not emerge by accident. They were developed, debated, and ultimately built into the foundation of the American system. And as you've just heard, uh these ideas still require explanation and defense. Every generation has to relearn them. Uh-huh. Every generation has to decide whether it will preserve them. That's the work TFAS is committed to. Uh uh educating students and teachers, equipping future generations, and ensuring that these principles remain understood and applied in the years ahead. Thanks for listening. We'll see you next time on Liberty and Leadership. Thank you for listening to the Liberty and Leadership Podcast. If you have a comment or question, please drop us an email at podcast at tfas.org. And be sure to subscribe to the show on your favorite podcast app and leave a five star review. Liberty and Leadership is produced at Podville Media. I'm your host, Roger Reim, and until next time, show courage in things large and small.