Adam Smith's American Revolution | Dan Klein | IEA Interview

In this IEA podcast episode, Reem Ibrahim sits down with Professor Daniel Klein to unravel why Adam Smith-writing in 1776 as revolution erupted-predicted America would become "one of the greatest and most formidable empires that ever was in the world." Starting with Smith's remarkable GDP forecast that America would overtake Britain within a century (which proved dead right), they trace how the Scottish economist saw five liberal principles emerging in colonial thought that would drive unprecedented prosperity.Daniel walks us through Smith's analysis of American thinkers like James Otis and John Adams, revealing how subsidiarity, religious freedom, limited government, free trade, and virtuous governance aligned with Smith's own philosophical framework. The discussion explores milestone moments-from Thomas Paine's Common Sense appearing months before The Wealth of Nations, to Smith's 1778 memo showing intimate knowledge of American affairs, and his prescient observation that "from shopkeepers, tradesmen and attorneys, they are become statesmen and legislators."They examine Smith's radical insight about religious free markets - how Pennsylvania's pluralistic approach would produce "candor and moderation" better than established churches - and his conviction that America's "Don't Tread on Me" spirit reflected a healthy recognition that "government is the institutionalization of coercion." The conversation reveals hidden connections between Edinburgh Enlightenment thinkers and the Founding Fathers, showing how David Hume, Edmund Burke, and Smith himself favoured a "let them go" approach to American independence.Looking to today's politics, they debate whether Smith would recognise his liberal hopes in modern America's centralised state, vast bureaucracy, and eroding constitutional checks. From Trump's tariffs to expanding federal power, Klein argues Smith would be "a lot less optimistic" about America's trajectory toward the subsidiarity and natural liberty he once celebrated. If you care about classical liberalism, constitutional design, or why the Scottish Enlightenment saw America as humanity's great experiment, this conversation is for you. Like, subscribe and hit the bell to catch future IEA podcast episodes. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit insider.iea.org.uk/subscribe