Key Arguments

• Smith explicitly limits the sovereign’s functions: 'According to the system of natural liberty, the sovereign has only three duties to attend to; three duties of great importance, indeed, but plain and intelligible to common understandings.'
• The first duty is external defence: 'the duty of protecting the society from the violence and invasion of other independent societies.'
• The second duty is internal justice: 'the duty of protecting, as far as possible, every member of the society from the injustice or oppression of every other member of it, or the duty of establishing an exact administration of justice.'
• The third duty concerns public goods: 'the duty of erecting and maintaining certain public works, and certain public institutions, which it can never be for the interest of any individual, or small number of individuals to erect and maintain.'
• He explains why these works and institutions will not be provided privately: 'because the profit could never repay the expense to any individual, or small number of individuals, though it may frequently do much more than repay it to a great society,' thereby giving an efficiency‑based rationale for limited government provision.

Source Quotes

The sovereign is completely discharged from a duty, in the attempting to perform which he must always be exposed to innumerable delusions, and for the proper performance of which, no human wisdom or knowledge could ever be sufficient; the duty of superintending the industry of private people, and of directing it towards the employments most suitable to the interests of the society. According to the system of natural liberty, the sovereign has only three duties to attend to; three duties of great importance, indeed, but plain and intelligible to common understandings: first, the duty of protecting the society from the violence and invasion of other independent societies; secondly, the duty of protecting, as far as possible, every member of the society from the injustice or oppression of every other member of it, or the duty of establishing an exact administration of justice; and, thirdly, the duty of erecting and maintaining certain public works, and certain public institutions, which it can never be for the interest of any individual, or small number of individuals to erect and maintain; because the profit could never repay the expense to any individual, or small number of individuals, though it may frequently do much more than repay it to a great society. The proper performance of those several duties of the sovereign necessarily supposes a certain expense; and this expense again necessarily requires a certain revenue to support it.

Key Concepts

• According to the system of natural liberty, the sovereign has only three duties to attend to; three duties of great importance, indeed, but plain and intelligible to common understandings:
• first, the duty of protecting the society from the violence and invasion of other independent societies;
• secondly, the duty of protecting, as far as possible, every member of the society from the injustice or oppression of every other member of it, or the duty of establishing an exact administration of justice;
• and, thirdly, the duty of erecting and maintaining certain public works, and certain public institutions, which it can never be for the interest of any individual, or small number of individuals to erect and maintain;
• because the profit could never repay the expense to any individual, or small number of individuals, though it may frequently do much more than repay it to a great society.

Context

Still in the concluding paragraphs of Book IV, Chapter IX, Smith moves from the general description of the system of natural liberty to a precise enumeration of the sovereign’s legitimate duties in that system.