Adam Smith's idea of free-market sorely highlighted the importance of people’s propensity to barter and trade and the significance of the economic cycle that is built upon self-interest which would lead to the wealth of the nation.
He defined the wealth of the nation as in increase in the wages of the poor rather than in the measure of the size of the king’s treasure which repelled the main ideas of the mercantilists.
However, this definition of Adam Smith’s seems to differ from the understanding of the free market that we know today which lays heavily on self-interest.
The two concepts seem to differ because we have been witnessing a free market economy that is being intensely driven by self-interest and self-interest only.
When such free market economy develops, the issue of economic inequality rises with it highlighting the self-interest of the stronger and richer individuals rather than focusing on increasing the wages of the poor which tilts away from the ideas Adam Smith proposed.
He says “All systems either of preference or of restraint, therefore, being thus completely taken away, the obvious and simple system of natural liberty establishes itself of its own accord. Every man, as long as he does not violate the laws of justice, is left perfectly free to pursue his own interest his own way, and to bring both his industry and capital into competition with those of any other man, or order of men”.
He did not define the free market economy as an economy that had no restraint. The restraint he proposed was the laws of justice which he states “As long as he does not violate the laws of justice is left perfectly free to pursue his own interest”.
One could say Adam Smith’s argument of free markets were ethical. Nevertheless, the free market that depends on a self-interested man without any restraint of laws of justice is bringing up rapidly changing competitions in the economy. It seems as if our definition of “self-interest” in our free market economy differs from the definition of “self-interest” that Adam Smith proposes.
The self-interest is shifting from one interest to another because of individuals who cannot fixate on a dedicated interest and our free market economy is full of competitions that are piling up on each other.
Due to the highly competitive economy, the value of ethics, and the laws of justice are getting lost on the way even though such competition in the market economy lowers the price of the goods and improves the quality of it.
The base idea of Adam Smith’s idealized free market that focuses on self-interest carries an ethical point of view. However, the free market we have right now is an endless competition of who can feed the starving society that longs for empty spaces in them to be filled and “feeding the majority with ideological consumptions”.
Even though the free market should not be limited by the government, probably it should be limited by the morality of human nature.