[lbo-talk] Adam Smith on Too Big to Fail

[michael perelman]

"To restrain private people, it may be said, from receiving in payment 
the promissory notes of a banker for any sum, whether great or small, 
when they themselves are willing to receive them; or, to restrain a 
banker from issuing such notes, when all his neighbours are willing to 
accept of them, is a manifest violation of that natural liberty, which 
it is the proper business of law not to infringe, but to support. Such 
regulations may, no doubt, be considered as in some respects a violation 
of natural liberty. But those exertions of the natural liberty of a few 
individuals, which might endanger the security of the whole society, 
are, and ought to be, restrained by the laws of all governments; of the 
most free, as well as of the most despotical. The obligation of building 
party walls, in order to prevent the communication of fire, is a 
violation of natural liberty, exactly of the same kind with the 
regulations of the banking trade which are here proposed."

-- 
Michael Perelman
Economics Department
California State University
Chico, CA
95929

530 898 5321
fax 530 898 5901
http://michaelperelman.wordpress.com