Front Page Titles (by Subject) Adam Smith on Social Justice - Literature of Liberty, January/March 1979, vol. 2, No. 1
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Adam Smith on Social Justice - Leonard P. Liggio, Literature of Liberty, January/March 1979, vol. 2, No. 1 
Literature of Liberty: A Review of Contemporary Liberal Thought was published first by the Cato Institute (1978-1979) and later by the Institute for Humane Studies (1980-1982) under the editorial direction of Leonard P. Liggio.
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Adam Smith on Social Justice
“Adam Smith and the Problem of Justice in Capitalist Society.” The Journal of Legal Studies 6 (June 1977): 399–409.
Adam Smith viewed justice as a natural sentiment of mankind which did not simply accept de facto property arrangements but inquired into their justness and demanded restitution for any past injustices. Smith's view is essential to the private property basis of capitalism. In contrast a utilitarian view that endorses governmentally dictated property distribution substitutes government property for private property. In Smith's capitalism, income from unjustly acquired property, even though sanctioned by government, would be expropriation of the just, but governmentally excluded, owners.
Smith considered Hugo Grotius's writings on justice, although imperfect, “at this day the most complete work that has yet been given upon this subject.” The original acquisition of property was just if it did not involve injuring another person or obstruct their freedom of acquisition. The role of law is to leave room so that the “simple system of natural liberty establishes itself of its own accord.” Smith held that the market should be the ordinary regulator of justice. Individuals, in the market, seeking their personal aims, will effect “by an invisible hand” unintended social goods and ends. “By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it.”
Smith anticipated that division of labor might discourage intellectual improvement and diminish the very spirit of individualism which gave rise to the success of division of labor. But he felt that the market would compensate for such dangers (if the law did not intrude) since people would naturally develop voluntary associations which would contribute to intellectual improvement and the individualist spirit.