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In this paper I propose to investigate the problem of liberty in Adam Smith's work. Suggesting that there is a “problem” may strike some as strange. After all, is not Smith simply the great defender of the system of natural liberty, a set of economic proposals that would remove the State from the business of directing the economy? Does he not maintain unequivocally that individuals are the best judges of their own self-interest and argue that they should be allowed to commit their labor and capital to those enterprises they deem most useful? Is Smith not one of the great defenders of the concept of negative liberty in modern liberal thought?

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In this article, I examine critically Donald Winch's interpretation of the politics of Adam Smith. I explain how Winch wrests Smith's political thought out of the larger vision of commercial society that is found in his moral, political, and economic writings, and how Winch misreads Smith's understanding of particular political problems such as the dehumanized workforce and the standing army. I also show how Winch's civic humanist reading of Smith's political thought fails to appreciate Smith's liberal conceptualizations of corruption and public-mindedness in a modern commercial society. Finally, I suggest that our failure to understand the politics of Adam Smith does not lie in our liberal interpretation of his work, as Winch claims, but in our understanding of what constitutes liberal political discourse.

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