“Altogether, an encounter with Vernon L. Smith — who rose from the Kansas plains to leave a mark on the world — is an encounter with intellect, practicality, and humane values. That earlier Smith, from Scotland, would smile.”

So concludes Jay’s excellent piece about Vernon Smith, the 2002 winner of the Nobel prize in economics — which he won while he was a professor at George Mason University, my alma mater.

Adam Smith would no doubt smile, since Vernon is one of his modern students. As part of our Adam Smith 300 project, a series of monthly essays celebrating Adam Smith’s 300th birthday last year, Vernon wrote the February entry. He concluded that essay as follows:

Adam Smith brings to our contemporary intellectual and socio-economic world a rich theory of community and economy fresh and relevant 300 years after his birth. Community is founded in the rules we learn to follow among family, friends, and neighbors. Efficiency is an outcome of community, an unplanned consequence. The rules that arise in communities, summarized as propositions, fall into two categories: beneficence and justice.

Beneficence is about the good things we do for each other, things that underlie reciprocity in community, and ultimately, I believe, trade in economy. Justice is about bounding the harmful things we do to each other, so that we may achieve a stable state of security from injury. “Among equals each individual is naturally, and antecedent to the institution of civil government, regarded as having a right both to defend himself from injuries, and to exact a certain degree of punishment for those which have been done to him,” Smith writes in TMS.

Linguists have discovered that the 18th-century English word “fair,” whose opposite is “foul,” had no translation into any other language. Today it has evolved “among equals,” into the concept of fair outcome.

Underlying how the West became rich is the diffusion of Smith’s classical liberal ideas, and the rule-governed people living with these ideas, to the U.S., Canada, Australia, New Zealand, Hong Kong, Taiwan, South Korea, and the world.

After you’re finished with Jay’s piece, read the whole thing here.