Adam Smith (1723–1790) and Ayn Rand (1905–1982) are widely considered to offer merely different flavors of pro-capitalist thought. Although Smith never used the word “capitalism” (which was only popularized in the 19th century by the system’s socialist critics), he is commonly referred to as “the father of capitalism.” Rand called herself a “radical for capitalism” and has also been nicknamed “the goddess of the market.”

It seems reasonable, then, to expect them to share a large amount of common ground. But, although there is some, it turns out that their differences are greater—and far more consequential—than their similarities. Examining these similarities and differences gives us a clearer picture of both thinkers, the respective roles of their ideas in shaping history, and what each brings to the table for those promoting freedom and flourishing today. Toward that end, let’s look at five areas of their thought, going from least to most fundamental (and from most to least similar).

First, a few words about something that sets them apart from virtually all others in the free-market tradition: Both were philosophers who offered comprehensive views on ethics, a field each regarded as more fundamental and thus, more important than economics.

Most people think of Adam Smith as the author of The Wealth of Nations, which, among other things, was perhaps the first extensive attack on government intervention in trade ever published. But Smith’s main claim to fame during much of his life was, in fact, his first book, published when he was just thirty-five, his Theory of Moral Sentiments. Smith considered it his better and more important work. Although The Wealth of Nations became influential in Smith’s own lifetime, his Theory of Moral Sentiments was practically an overnight success. Smith’s closest friend, David Hume, teased him that “your Book has been very unfortunate: For the Public seem disposed to applaud it extremely. It was looked for by the foolish People with some Impatience; and the Mob of Literati are beginning already to be very loud in its Praises.”1

On the strength of this first book, Smith was invited to travel Europe tutoring the sons of a wealthy patron, thus luring him from his post as the chair of moral philosophy at the University of Glasgow, perhaps the most prestigious academic position in Scotland at the time. And not for another seventeen years, long after the Theory of Moral Sentiments had cemented Smith’s name in the pantheon of Scottish Enlightenment thinkers, would he publish his dense, prolix, minutely detailed Wealth of Nations. It probably would come as a surprise to Smith, then, that he’s more remembered for the latter work today and that his moral writings are largely ignored.

It is harder to make the same mistake regarding Rand (though, that doesn’t stop some from making it). Not only did she write much more recently, but she communicated her politico-economic ideas in epic works of romantic literature that concretely demonstrate the importance of moral values in man’s life. She also clearly and persistently articulated her view that politics and economics are downstream from and dependent on ethics, among other branches of philosophy, stating, for instance:

Objectivism [Rand’s philosophy] is a philosophical movement; since politics is a branch of philosophy, Objectivism advocates certain political principles—specifically, those of laissez-faire capitalism—as the consequence and the ultimate practical application of its fundamental philosophical principles. It does not regard politics as a separate or primary goal, that is: as a goal that can be achieved without a wider ideological context. Politics is based on three other philosophical disciplines: metaphysics, epistemology and ethics—on a theory of man’s nature and of man’s relationship to existence. It is only on such a base that one can formulate a consistent political theory and achieve it in practice. . . . Objectivists are not “conservatives.” We are radicals for capitalism; we are fighting for that philosophical base which capitalism did not have and without which it was doomed to perish.2

These are nearly the first words on the first page of Rand’s Capitalism: The Unknown Ideal, the title itself indicating a moral view of capitalism for which the rest of the book serves as an extended argument and demonstration. “There is a fundamental difference between our [Objectivist] approach and that of capitalism’s classical defenders and modern apologists,” she went on to say. “With very few exceptions, they are responsible—by default—for capitalism’s destruction. The default consisted of their inability or unwillingness to fight the battle where it had to be fought: on moral-philosophical grounds.”3 In this respect—as moral philosophers first, advocates of free-trade second—Smith and Rand serve as interesting and important bookends for the two centuries of free-market thought between them. Let’s tease out their similarities and differences, looking at five areas of their thought: human progress, government, economics, industriousness, and morality.

Human Progress

Smith was born in 1723 in the small port town of Kirkcaldy, Scotland. He spent most of his life in Britain, where he witnessed the very beginnings of the Industrial Revolution, a fount of human progress. . . .

“Those who want to defend freedom and flourishing today can (and ought to) recognize the life-serving contributions of Adam Smith. But they can’t achieve their goals based on his ideas alone.” —@revivingreason
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Acknowledgements: I’d like to thank Eric Daniels and Eamonn Butler for their helpful comments on a draft of this article. Of course, all opinions and any errors herein are my own.

1. Dennis C. Rasmussen, The Infidel and the Professor (Princeton, NJ: Princeton University Press, 2017), 106; see this book for details on their friendship.

2. Ayn Rand, introduction, in Capitalism: The Unknown Ideal (New York: Signet, 1967), vii.

3. Rand, introduction, viii.

4. Rasmussen, The Infidel and the Professor, 38.

5. These points are made by Dennis C. Rasmussen in his magnificent and detailed survey of the relation between Rousseau and Smith, The Problems and Promise of Commercial Society (University Park: Pennsylvania State University Press, 2008).

6. Albert Schinz, “French Origins of American Transcendentalism,” American Journal of Psychology 29, no. 1 (January 1918): 50–65,

7. See Rasmussen, Problems and Promise of Commercial Society.

8. Adam Smith, The Wealth of Nations and the Theory of Moral Sentiments (Copenhagen: Titan Read, 2015), 736.

9. Quoted in Rasmussen, Problems and Promise of Commercial Society, 74.

10. Smith, Wealth of Nations, 400.

11. Smith, Wealth of Nations, 15.

12. Smith, Wealth of Nations, 739.

13. Anne C. Heller, Ayn Rand and the World She Made (New York: Doubleday, 2009), 31.

14. Dina Schein Federman, “We the Living and the Rosenbaum Family Letters,” in Essays on Ayn Rand’s We the Living, 2nd ed. (Lanham, MD: Lexington, 2012), 70; see the rest of this essay for more details on the living conditions of Rand’s family.

15. Federman, “We the Living and the Rosenbaum Family Letters,” 67–70.

16. Heller, Ayn Rand and the World She Made, 53.

17. Ayn Rand, “For the New Intellectual,” in For the New Intellectual (New York: Signet, 1963), 21.

18. Ayn Rand, Atlas Shrugged (New York: Signet, 1957), 4.

19. Ayn Rand, “The Objectivist Ethics,” in The Virtue of Selfishness (New York: Signet, 1964), 29.

20. Smith, Wealth of Nations, 439, 444, 475, 450.

21. Adam Smith to Andreas Holt, October 1780, in “Scottish Thought and Letters in the Eighteenth Century,” University of Glasgow, (accessed May 5, 2023).

22. Smith, Wealth of Nations, 124.

23. Smith, Wealth of Nations, 126, 146.

24. Smith, Wealth of Nations, 147.

25. Smith, Wealth of Nations, 679.

26. Smith, Wealth of Nations, 1180–81.

27. Smith, Wealth of Nations, 1509.

28. Rasmussen, Problems and Promise of Commercial Society, 172.

29. Rasmussen, Problems and Promise of Commercial Society, 172.

30. “Adam Smith vs. Ayn Rand on Justifying the Free Society,”, May 28, 2014, Although a full elaboration of Rand’s methodology is beyond the scope of this essay, it’s worth nothing the irony of this charge against Rand. Her philosophy of Objectivism explicitly aimed at resolving the conflicts between “those who claimed that man obtains his knowledge of the world by deducing it exclusively from concepts, which come from inside his head and are not derived from the perception of physical facts (the Rationalists)—and those who claimed that man obtains his knowledge from experience, which was held to mean: by direct perception of immediate facts, with no recourse to concepts (the Empiricists).” See Rand, “For the New Intellectual,” 27. Objectivism repudiates rationalism and particularly its chief modern proponent, Immanuel Kant.

31. Rand, Atlas Shrugged, 1061.

32. Thomas Jefferson, “First Inaugural Address,” The Papers of Thomas Jefferson, vol. 33 (Princeton, NJ: Princeton University Press, 2006), 148–52,

33. Ayn Rand, “Man’s Rights,” in The Virtue of Selfishness (New York: Signet, 1964), 109.

34. This brevity should not be mistaken for a low evaluation of their importance. Even in Smith’s day, his economic views convinced Prime Minister William Pitt to begin liberalizing aspects of the British economy, and they’ve had tremendous positive impacts across the globe ever since, helping foment the Industrial Revolution.

35. “Spontaneous Order,” Online Library of Liberty, (accessed May 6, 2023).

36. “Ranking Burdens by State,” Institute for Justice,; (accessed May 6, 2023).

37. Eamonn Butler, Adam Smith: A Primer (London: Institute for Economic Affairs, 2007), 63–64, 68,

38. Rasmussen, Problems and Promise of Commercial Society, 176.

39. Smith, Wealth of Nations, 475.

40. Smith, Wealth of Nations, 31.

41. Smith, Wealth of Nations, 33.

42. Smith, Wealth of Nations, 68–69.

43. Rasmussen, Problems and Promise of Commercial Society, 73.

44. Smith, Wealth of Nations, 259.

45. Karl Marx, Grundrisse, in Karl Marx: Selected Writings, ed. David McLellan, 2nd ed. (Oxford: Oxford University Press, 2000), 389.

46. Ayn Rand “What Is Capitalism?,” in Capitalism, 14.

47. Smith, Wealth of Nations, 51.

48. Rand, Atlas Shrugged, 1064.

49. Ayn Rand, “America’s Persecuted Minority: Big Business,” in Capitalism, 45.

50. Smith, Wealth of Nations, 328.

51. Smith, Wealth of Nations, 1540.

52. Smith, Wealth of Nations, 1358.

53. Rand, Atlas Shrugged, 1020.

54. Rand, “The Objectivist Ethics,” 27.

55. John Locke, An Essay Concerning Human Understanding (Lawrence, KS: Neeland Media, 2004), loc. 348.

56. Thomas Reid, Essays on the Active Powers of the Human Mind, in The Works of Thomas Reid, 3rd ed., ed. Sir William Hamilton (Edinburgh: Machlachlan and Stewart, 1852), 581.

57. David Hume, A Treatise of Human Nature (Lawrence, KS: Neeland Media, 2004), 290.

58. Hume, Treatise of Human Nature, 295.

59. Jonathan Haidt, The Righteous Mind: Why Good People Are Divided by Religion and Politics (New York: Vintage, 2013), 53.

60. Haidt, The Righteous Mind, 53–54.

61. Rasmussen, The Infidel and the Professor, 88.

62. Phyllis Vandenberg and Abigail DeHart, “Bernard Mandeville (1670–1733),” Internet Encyclopedia of Philosophy, (accessed May 2, 2023).

63. In the preface to the The Fable of the Bees, Mandeville wrote that “the main Design of the Fable, (as it is briefly explain’d in the Moral) is to shew the Impossibility of enjoying all the most elegant Comforts of Life that are to be met with in an industrious, wealthy and powerful Nation, and at the same time be bless’d with all the Virtue and Innocence that can be wish’d for in a Golden Age; from thence to expose the Unreasonableness and Folly of those, that desirous of being an opulent and flourishing People, and wonderfully greedy after all the Benefits they can receive as such, are yet always murmuring at and exclaiming against those Vices and Inconveniences, that from the Beginning of the World to this present Day, have been inseparable from all Kingdoms and States that ever were fam’d for Strength, Riches, and Politeness, at the same time.” See Bernard Mandeville, The Fable of the Bees or Private Vices, Publick Benefits (Oxford: Clarendon Press, 1732), accessed at Online Library of Liberty,

64. Mandeville, The Fable of the Bees, preface.

65. Smith, Wealth of Nations, 1540.

66. Smith, Wealth of Nations, 1309.

67. Smith, Wealth of Nations, 1348.

68. Smith, Wealth of Nations, 1314.

69. Smith, Wealth of Nations, 1315.

70. Smith says, “Pity and compassion are words appropriated to signify our fellow-feeling with the sorrow of others. Sympathy, though, its meaning was, perhaps, originally the same, may now, however, without much impropriety, be made use of to denote our fellow-feeling with any passion whatever.” See Smith, Wealth of Nations, 1311.

71. Smith, Wealth of Nations, 1317.

72. Smith, Wealth of Nations, 1324.

73. Smith, Wealth of Nations, 1327.

74. Smith, Wealth of Nations, 1478.

75. Haidt, The Righteous Mind, 59.

76. Smith, Wealth of Nations, 1377.

77. Rasmussen, The Infidel and the Professor, 89.

78. Jung Min Shin, “Adam Smith's Impartial Spectator: His Reliance on Societal Values, Limits in Inspiring Altruism, and Application in Today's Context,” Vanderbilt Undergraduate Research Journal 10, (2015),

79. Smith, Wealth of Nations, 1430.

80. Smith, Wealth of Nations, 1391.

81. Rand, “The Objectivist Ethics,” 14.

82. In philosophy, “rationalism” historically has been used to refer to the view that the senses deceive us and that we can grasp truths only by reasoning in a vacuum, disconnected from the evidence of experience. Rand repudiated this view. See footnote 30 for more detail.

83. Rand, Atlas Shrugged, 1013.

84. Ayn Rand, “The Metaphysical versus the Man-Made,” in Philosophy: Who Needs It (New York: Signet, 1984), 36.

85. Rand, Atlas Shrugged, 1014.

86. Rand, “For the New Intellectual,” 55.

87. Ayn Rand, “Philosophy: Who Needs It,” in Philosophy: Who Needs It (New York: Signet, 1984), 7–8.

88. Rand, “The Objectivist Ethics,” 31.

89. Leonard Peikoff, The Ominous Parallels: The End of Freedom in America (New York: Meridian, 1993), 62.

90. Ayn Rand, The Fountainhead (New York: New American Library, 2016 [1943]), Kindle ed., loc. 14648.

91. Rand, The Fountainhead, loc. 13075.

92. Rand, The Fountainhead, loc. 13078.

93. Rand, Atlas Shrugged, 1014.

94. Ayn Rand, introduction, in The Virtue of Selfishness, centennial ed. (New York: Signet, 1964), xi.

95. Reid, Essays on the Active Powers of the Human Mind, 580.

96. Rand, introduction, vii.

97. Rand, introduction, vii.

98. Rand, Atlas Shrugged, 1022.

99. Smith, Wealth of Nations, 1309.

100. Ayn Rand, “The Ethics of Emergencies,” in The Virtue of Selfishness (New York: Signet, 1964), 51.

101. Rand, “The Ethics of Emergencies,” 50.

102. Rand, “The Ethics of Emergencies,” 53.

103. Both of Rand’s major novels, The Fountainhead and Atlas Shrugged, demonstrate this in detail.

104. Ayn Rand, “Brief Summary,” The Objectivist, September 1971, reprinted in The Objectivist, Volumes 5–10, 1966–1971 (Irvine, CA: Second Renaissance, 1990), 1089.

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