Adam Smith Would Be Rolling in His Grave

With tariffs back in the news and be it whether it’s debates over steel, semiconductors, or Chinese EV imports, I can’t help but imagine Adam Smith rolling in his grave. Not because he’d be surprised, but because we seem to have learned so little from him. Wealth of Nations wasn’t a love letter to tariffs or central planners; it was a case for letting markets do what they do best, which is to allocate resources more efficiently than politicians ever could.

Smith’s insight was revolutionary because it flipped 18th-century thinking on its head. He told governments to stop worrying about hoarding gold or running trade surpluses and instead focus on productivity and innovation. Fast-forward to 2025, and here we are, re-litigating the same debates, with politicians on both sides promising to “protect American jobs” by raising tariffs. But protectionism rarely protects the people it claims to help. Consumers pay higher prices, exporters face retaliation, and innovation slows because firms are insulated from competition.

As Glory Liu wrote recently in The Wall Street Journal, Smith’s image has been reinvented time and again, from Hamilton’s case for tariffs to Milton Friedman’s Cold War defense of free markets and that history is exactly why his ideas still matter. The WSJ piece reminded me that Friedman’s version of Smith isn’t just a relic of the 1980s but it’s exactly the Smith we need today. When we slap tariffs on imported goods or subsidize favored industries, we’re not just distorting prices, we’re undermining the very mechanism that drives prosperity: the invisible hand of self-interest that matches supply with demand far better than any government directive.

The irony is that America is at its most innovative when competition is fierce. The rise of Tesla, Nvidia, and SpaceX didn’t come from the government deciding “this is the winner,” but from entrepreneurs taking risks and markets rewarding them. Smith would argue that the best way to prepare for the future, whether it’s AI, clean energy, or biotech, is to create an environment where markets are open, trade is free, and capital can flow to the best ideas, not the most politically connected ones.

So yes, Adam Smith is probably turning in his grave right now but not because capitalism has failed, but because we keep forgetting how it actually works. If we want a stronger economy, we should stop trying to micromanage it and start trusting the system Smith laid out nearly 250 years ago.