"The character of and commitment to equality remains both controversial and disputed among historical and theoretical analysts of classical political economy, and this has been true from the beginning. Smith's earliest writings confronted the critique of commercial society, the vice of luxury, and the inequality both fostered and perpetuated by the regime of private property made by Rousseau in his early economic writing, the Discourse on Inequality (2009 [1755]). Smith responded in at least two ways to this critique of the inherent inequality and unfreedom of commercial society. On the one hand, Smith recognized that a driving force of market operation and expansion was in some sense dependent on that acquisitive psychology that accompanied “the useful inequality in the fortunes of mankind which naturally and necessarily arise from the various degrees of capacity, industry, and diligence in different individuals” (Smith 1983 [1762–3/1766]: 338). This, of course, was to recognize a form of inequality of capacity in society with which Rousseau did not disagree. On the other hand, Smith went further in both the Wealth of Nations and the Lectures on Jurisprudence, and argued untramque partem that the very pursuit of luxury critiqued as vice by Rousseau and others helped to destroy the Gothic ruling class, who “sold their birthrights for baubles,” and in destroying the old feudal order of entrenched inequality, brought both greater liberty and greater equality to those living in the commercial age. In this sense, Smith appeared to employ the rhetorical device of paradiastole to render the putative vice of luxury as a virtue in the classical political economic context, and to suggest that private property – seen as the source of injustice for critics of the commercial order such as Rousseau, was – in the four stages of the progress of society – the very source of justice, because around property basically unsocial natural men had unified in what Kant would later term an “unsocial sociability.” Smith produced other arguments as well for the destruction of monopolies, guilds, and corporations in order to equalize market-driven production and distribution with the understanding (or the hope) that greater social and economic equality would accompany the ever greater expansion of the market. However, it is unquestionable that Smith recognized the inequalities inherent within the actual operation of the market mechanism in his own lifetime, inequalities that later classicals such as Ricardo and Mill would openly admit."
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Shannon C. Stimson, "Classical Political Economy", in Coole, Diana H.; Gibbons, Michael; Ellis, Elisabeth et al., The encyclopedia of political thought (2014)
https://en.wikiquote.org/wiki/Discourse_on_Inequality
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Discourse on Inequality
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