Answer :
Government had a very limited but important role. In it were 3 major parts
- 1. administer justice.
- 2. protect the nation from outside aggression.
- 3. enforcing private property rights.
While Adam Smith championed the laissez-faire approach, he recognized the government's role in maintaining infrastructure, rule of law, and competitive markets to ensure a fair and efficient economy.
Adam Smith, widely regarded as "the father of capitalism," is acclaimed for his advocacy of the laissez-faire approach to economics. Despite his preference for minimal government intervention, Smith acknowledged that there were areas where government involvement was necessary. One significant role he allocated to the government was in the upkeep of institutions and public works that the private sector could not profitably maintain, such as infrastructure (e.g., roads, bridges) and institutions that uphold the rule of law (e.g., courts and police).
Moreover, Smith recognized that businesses, if left completely unregulated, might collude or engage in practices that prevent competition, ultimately harming the consumer and the economy. Hence, Smith conceded that governments should intervene to preserve competitive markets, preventing monopolies and providing necessary regulation to protect the interests of society at large. While advocating for an economy guided by the 'invisible hand', he understood the value of a governing authority to maintain market fairness and efficiency.
