Licensed Development – Econlib

March 2026 marks 250th anniversary of publication of An Inquiry into the Nature and Causes of the Wealth of Nations (1776). However, Adam Smith was also the author of Theory of Moral Sentiments (1759) and it was through his constant revisions of this earlier work that his most famous book appeared. One of the most effective methods TMS criticizes the “system person”. In contrast, Smith describes a man of “public spirit,” highlighting the humility inherent in this character. Unlike the principled person, who insists on the rightness of their ideal plans and wants to impose them on others, there is the humility of the public-spirited person. They have no right to impose their ideals on others; instead they rely only on persuasion and consent, never using violence.
Unfortunately, throughout the long history of colonialism, slavery, and the treatment of indigenous peoples, many experts were men of principle, rather than men of public spirit. Enter William Easterly’s critique of the “saviors of development” in Violent Saviors (2025). This book represents one of the most important contributions ever made to the ethical and methodological foundations of economic development. His argument challenges the technical view that development is a technical problem for professional design and policy implementation. Rather, Easter situates development within a liberal culture that emphasizes the freedom, dignity, and consent of those whose lives are influenced by economic policy. In this respect, Easter’s work can be seen as reviving the fundamental understanding clearly stated by Adam Smith: development must come from voluntary cooperation between individuals rather than the imposed designs of external authorities. Easter clearly resists the “West and the Rest” framework prevalent in many development economies.
He frames the development debate as a clash between two intellectual traditions. On the other side are the “saviors,” who believe that enlightened professionals can engineer the development of poor communities through carefully designed policies and institutional reforms. On the other side are the “skeptics,” who emphasize the limits of expert knowledge and the importance of allowing individuals and communities to shape their own ways of social and economic development. The roots of this division can be traced back to the eighteenth century, when Adam Smith offered a powerful critique of the paternalistic ideology that justified the defeat of empire in the name of progress.
Easterly always says that those involved in development projects must be given a voice in this process. The increase in the nation’s material wealth does not justify prioritizing institutional goals over individual needs. “There is nothing about us, without us,” is the motto that sums up the Easter message.
European empires often justified conquest by saying that it brought civilization, Christianity, and economic development to the people they conquered. Smith rejected this account. In The Treasure of NationsSmith described the “brutal injustice” of European colonial expansion, conquest and exploitation instead of benevolent development. Instead of imposing progress through force, Smith looked for an alternative based on voluntary exchange and mutual benefits from trade. He said, the meeting of different communities would produce great benefits if it could happen through peaceful exchanges instead of coercion.
The key issue for Smith and Easterly was not only whether development increases productivity but whether it respects the autonomy of individuals and communities. Trade is legal because it requires mutual consent: each party must judge for itself whether the transaction improves its welfare. Coercive arrangements—whether colonial law or paternalistic policy—violate this principle because they substitute the judgment of external authorities for the people directly affected. The big question was not just whether development policies “work,” but whether they respect the freedom and dignity of those under them. Dignity, respect, agency, and independence are the guiding principles, not efficiency, fundraising, and economic growth.
As we celebrate the publication of man’s greatest achievement, we pair Adam Smith with William Easterly. Smith’s liberal agenda included the pursuit of liberty, equality, and justice—the pillars of his principles of political economy. Bill Easterly stands as a worthy successor to this project, examining not only the nature and causes of nations’ wealth, but also the dignity, respect, and freedom of the people who inhabit it.


