The Retreat of Western Liberalism ↑

Capitalism works best in societies where there are high levels of trust

Adam Smith, the great theorist of free trade economics, is revered for his The Wealth of Nations. His companion work, The Theory of Moral Sentiments, is mostly forgotten. Yet it is the more important of the two. In it, Smith sets out why capitalism works best in societies where there are high levels of trust between its participants. When social trust falls, the cost of doing business rises.

Edward Luce, 2017, from the book The Retreat of Western Liberalism