Reflections on the Foundations of American Ideals

Most Americans can easily recall the beginning lines of a significant text from 1776, yet many might struggle to remember the name of its counterpart.

That summer in Philadelphia, Thomas Jefferson, alongside his peers, stated that all men are created equal and endowed with certain unalienable rights, such as life, liberty, and the pursuit of happiness. The resulting documents became cornerstone texts for American politics, read aloud every July 4th, memorized by schoolchildren, and often mentioned by presidents.

Meanwhile, three thousand miles away, a Scottish philosopher, Adam Smith, published “Survey on the Nature and Causes of National Wealth” on March 9 of the same year. This work, in its own right, was equally groundbreaking.

While Jefferson made a case for political freedom, Smith argued for economic freedom. Jefferson contended that governments obtain their legitimate authority from the consent of the governed, while Smith maintained that economics draws its productivity from the choices of free individuals.

So, here we have two documents, one year, and a broad discussion about political and economic freedom.

At first glance, the timing might seem coincidental, but it’s rooted in a shared Enlightenment perspective, both thinkers drawing on similar ideas of individual rights and dignity.

There’s no evidence that Jefferson and Smith ever met or communicated. Jefferson did, however, later call Smith’s “Wealth of Nations” the best book on political economy. Smith’s work was published in March, Jefferson’s declaration followed in July. Despite the distance and time, both reached a similar conclusion: individuals, not the state, are the rightful authors of their own lives.

For a period, Americans recognized both aspects of freedom as intertwined. Political and economic freedoms were seen as two sides of the same coin, both affirming that individuals, rather than organizations, are the rightful authors of their destinies.

But something has shifted.

Today, while Jefferson’s words are celebrated with fireworks and festivities, Smith’s principles are confined to economics classrooms and policy discussions, often regarded as outdated in the face of modern economic complexities.

The ideas enshrined in Jefferson’s declaration are largely accepted now; debates around the inalienable rights of individuals seem settled. We rarely question whether a government should dictate how people express their beliefs or how they worship.

On the flip side, Smith’s ideas face continuous scrutiny. There are frequent arguments suggesting that governments should choose which industries thrive, which technologies receive funding, and which companies need protection from the consequences of their own decisions.

While we’ve upheld political freedom, there seems to be a slow erosion of our economic freedoms.

This gradual shift is peculiar, almost so subtle that it often goes unnoticed.

Economic planning discussions usually arise cloaked in a sense of urgency. They present seemingly necessary measures against the supposed chaos of the free market. The ideas of experts often prevail, suggesting that the invisible hand of the market is, at times, too slow or unfair for the pressing challenges we face.

In light of the 250th anniversary of these foundational texts, it’s worthwhile to reflect on how we’ve arrived at our current state.

The 20th century served as a vast testing ground for economic planning, yielding results that were at times enlightening, though not always positive. Models of complete central planning, like the Soviet system, ultimately faced collapse or stagnation. Western industrial strategies yielded mixed outcomes; while some safeguarded established players, others, at times, did support emerging winners.

Even in the most successful postwar economies, the prosperity largely stemmed from reasonable market freedoms that fueled growth necessary for everything else. The takeaway isn’t that all interventions falter, but rather that the planning instinct often overlooks the benefits of spontaneity.

Conversely, monumental economic advancements over the past fifty years emerged not from government schemes but from the decentralized decisions of individuals.

Think about it: the personal computer, the internet, smartphones, biotechnology, and artificial intelligence. Even when public funds kicked things off, no central planning directed their final outcomes. Each was molded through numerous experiments by entrepreneurs and investors chasing opportunities others didn’t recognize.

Smith grasped this well. His pivotal insight transcended mere market efficiency; his moral understanding was deeper.

Free exchange honors the dignity of individuals making informed judgments about their needs and aspirations. When someone else makes plans on your behalf—even with noble intentions—they overshadow your own judgment. This approach reduces citizens to mere components in a system, rather than recognizing them as responsible authors of their lives.

This isn’t merely an economic critique; it’s fundamentally human.

Jefferson, from a political standpoint, made a similar claim: tyranny is not only flawed due to its outcomes but also because it denies the essential dignity of self-governance. Consent from the governed is not just a method for crafting efficient governance; it recognizes humans as ends in themselves, not as means to fulfill others’ aims.

Essentially, the two texts from 1776 resonate with the same message. They both affirm that the individual, not the state, is the cornerstone of a free society.

They converge on a conclusion that insists the government’s role is to protect the environment where free individuals can pursue their happiness, instead of defining what happiness entails or dictating the means to achieve it.

We only celebrate half of this discourse each July 4th. Meanwhile, over the last century, we’ve quietly dismantled the other half, always with sincere intentions and assurances that this time, our plans will succeed.

As we approach the 250th anniversary of our foundational relationship, one must ponder what we have sacrificed in this ongoing exchange.

While Smith’s prose may not evoke the same immediate resonance as “All men are created equal,” he wasn’t merely an economist, and his writing offers its rewards in different ways. Within his lengthy tome is a significant message: “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their self-interest.”

This is often interpreted as a defense of selfishness, equating capitalism to mere greed with better packaging. Such a view overlooks essential truths.

Smith was not celebrating self-interest alone; he posited that free exchange channels individual self-interest into a societal benefit, with no need for anyone to be particularly clever, virtuous, or powerful to direct outcomes. The butcher does not need to care for you to provide your meal—all that’s needed is the freedom to trade. This system thrives not because of angelic impulses but because freedom permits ordinary motivations to generate remarkable collective achievements.

It’s not about organizing better; it’s about empowering better individuals—one that safeguards freedom, enforces contracts, and allows life to unfold naturally.

Jefferson recognized that the core aim of government is to create conditions for freedom while restraining itself. Smith held similar views about economic life. Both texts from 1776 share a destination: a society where individuals are trusted to govern themselves, interact freely, and seek happiness on their own terms.

Yet, 250 years later, that trust seems to be faltering. Industrial policies are regaining traction across the political spectrum. Tariffs, duties, and managed competition are marketed as sophisticated modern solutions to the supposed chaos of free markets, as though the wisdom from 1776 represents problems to solve rather than principles to uphold.

This shift isn’t abrupt—not a dramatic change but more of a consistent progression, often cloaked in good intentions. Gradually, we have substituted individual freedom for institutional decision-making in both the political and economic arenas.

The Fourth of July celebrations honor a revolution that transcends the disputes over taxes and representation. It championed the radical belief that individuals could regulate their lives—politically, economically, and morally—without the mandates of a sovereign.

In that same year, Adam Smith posited an answer to the same inquiry.

Perhaps for the sake of understanding, we should consider reading both in tandem as we mark this 250-year milestone.