Hong Kong has created Virtue along its ways to struggle against the circumstances....
By a twist of historical circumstance, this distant British colony unexpectedly produced a senior official who truly understood Adam Smith’s ideas and implemented many of his principles in Hong Kong—thereby launching a political economy experiment rarely seen in human history.
Author: GUDORDI | 2026-01-29
因適應現實環境而創造了美德。
Fac de necessitate virtutem.
Making a virtue out of necessity.── 拉丁諺語
In the previous article, the author has put forward an alternative idea that Adam Smith may have spent his entire life reflecting on how to make human society better, and that the ‘Free Market Commercial Society’ was the answer he implied, even though he has not stated this out that explicitly. And as such, the creation and accumulation of material wealth may represent only part of what the process can bring —or it is perhaps just one of the virtues that is associated with the Free Market Commercial Society.
Unlocking Individual Creativity and Human Potential
We note that in both The Theory of Moral Sentiments and The Wealth of Nations, Adam Smith has not provided a detailed blueprint of the free market commercial society he envisioned. At the same time, we understand that Adam Smith has unfinished intellectual work which he regrets about but for which we do not have that many clues as he has asked his friends to burn all of them a few days before he passed away. Could a more detailed blueprint of the free market commercial society be what Smith intended to focus on in his unfinished third masterpiece?
What we do know is that in 1791, Smith made his final and substantial revisions to The Theory of Moral Sentiments. In doing so, he introduced a comparison between what he called the “System of Man” and the “System of Natural Liberty.” He emphasized that in society, every individual should have the opportunity to express and develop themselves, rather than being treated like pieces on a chessboard, moved at will by a central planner— however attractive the outcome directing people like chess pieces might appear to be able to produce for society as a whole.
From this perspective, enabling individuals to fully exercise their creativity and capabilities occupies indeed a very central and foundational place in Smith’s conception of a free market commercial society.
Smith emphasizes that everyone should have the opportunity to realize their potential in society. (Wikimedia Commons)
What are the intellectual origins of Adam Smith’s thought?
What, then, were the intellectual origins of Adam Smith’s ideas? This does not seem to be a question that has been widely explored in depth. One possible influence was Britain’s historical identity as “a nation of shopkeepers,” a tradition that may have shaped Smith’s thinking. After all, Britain was once a relatively peripheral European country with limited natural resources. Yet it became the birthplace of the Industrial Revolution, and its wealth and national power rose with remarkable speed. Such dramatic transformation would naturally have sparked Smith’s curiosity.
At the same time, historical accounts suggest that Smith had deep sympathy for the poor and disadvantaged. Being a moral philosopher first and foremost, it was only natural that Smith would be concerned with the overall well-being of society. In this sense, Smith’s thought may be understood as a synthesis of the spirit of his age and his own personal convictions.
It is also worth noting that from the late eighteenth century onward, Britain no longer developed along the lines of a “nation of shopkeepers.” Instead, it gradually embarked on the path of building a global colonial empire. Smith strongly disagreed with this direction. He believed that colonies brought little more than vanity and were, in reality, a burden to the nation. Colonial expansion, in his view, risked fostering complacency and dependency, encouraging people to live off colonial resources rather than remain self-reliant, practical, and industrious small proprietors.
Accordingly, Smith argued that Britain should focus on expanding equal and mutually beneficial trade with its colonies. He even suggested the possibility of forming a fair trade union between Britain and America, and at one point proposed granting American representation in the British Parliament to strengthen the commercial partnership between the two nations.
British Colonial Policy: Turning American Shopkeepers into Great Statesmen.
It is also worth noting that, despite Smith’s careful and cautious writing style, he made two remarkably bold predictions: first, that the United States would become a world power, and second, that Britain would decline. Remarkably, he made these forecasts at a time when the British Empire was at its zenith, and the very survival of the United States as a nation was still uncertain. What is even more significant is that the logic behind both predictions is closely connected—they both relate to what Smith considered the fundamentally flawed British colonial policy.
The author recall that Smith once remarked that Britain’s colonial policies compelled American shopkeepers, tradesmen, and attorneys to become true statesmen and legislators (…“from shopkeepers, tradesmen and attornies, they are become statesmen and legislators…”). These individuals were, across the Atlantic, laying the foundations for what might become one of the greatest nations in human history. The greatness Smith referred to likely lay in the American spirit of nation-building—its emphasis on unleashing the creativity and potential of its people.
The American Declaration of Independence emphasized unleashing the creativity and potential of the people . (Wikimedia Commons)
What Lies Ahead for Hong Kong’s Future?
described above, how should we view Hong Kong’s future? Strictly speaking, the political economy framework of a free-market commercial society that Smith envisioned was rooted in Britain’s tradition of a “nation of shopkeepers” and shaped by his profound insights. Yet Britain has ultimately chosen not to cultivate further along its small-proprietor tradition, instead, it has chosen to follow a different path and as such, the “secret formula” for unleashing such a system might have gradually faded out in Britain. By a remarkable twist of history, however, more than a century later, a distant British colony produced a senior official who truly understood Smith’s ideas and, drawing on many of them, implemented in Hong Kong a political economy experiment rarely seen in human history.
Looking back, the framework of a free-market commercial society guided Hong Kong successfully through many trials and challenges, even embodying the Latin adage cited at the beginning of this article. That said, decades have passed and decades are a long time, and today Hong Kong faces circumstances that are very different from those of the past. What, then, lies ahead for Hong Kong’s future? The author will explore this question further in the next article.
