4.1 American Attitudes About Government and Politics

• Individualism: the belief that individuals are responsible for their own success and should be free to make their own choices, with limited interference from government.
• Equality of opportunity: everyone should have a fair chance to succeed, starting from the same rules. This is different from equality of outcome, the idea that results like income should be more equal.
• Free enterprise: an economy where private individuals and businesses own property, compete and make most economic decisions, with prices set mainly by markets.
• Rule of law: everyone, including government officials, must follow the same laws, which are publicly known and applied fairly.
• Limited government: government's power is restricted to protect individual liberty (1.1).

Agreement on these values hides real disagreement about what they require. Take equality of opportunity. Some Americans think it means removing legal barriers and then letting people compete; others think it requires government programs, like funding for schools in poor areas, so people start on a more level field. Or take free enterprise: some want markets left mostly alone, while others think regulation is needed to keep competition fair and protect workers and consumers.

That's why the same value can support opposing policy positions. On the exam, when a question asks how a value relates to a debate, explain how each side interprets it.

Adam Smith, a Scottish philosopher, published The Wealth of Nations in 1776, the same year as the Declaration of Independence. It became one of the founding works of modern economics. Its core principles:

• Self-interest drives economic activity. Bakers and brewers supply your dinner not out of kindness but because selling it benefits them. That self-interest, in a competitive market, still serves the public.
• The invisible hand: when individuals pursue their own gain in free markets, they are led, as if by an invisible hand, to promote the good of society, even though that isn't their goal. Competition pushes producers to offer what people want at good prices.
• Division of labor: splitting work into specialized tasks greatly increases productivity. Smith's famous example is a pin factory, where a few workers each doing one step make far more pins than they could each working alone.
• Competition and free trade: Smith criticized mercantilism, the system of government-granted monopolies, tariffs and trade restrictions meant to pile up national wealth in gold and silver. He argued that open markets and competition make nations richer.
• A limited but real role for government: Smith said government should defend the nation, run a system of justice that protects property and enforces contracts, and provide certain public works and institutions, such as roads and basic education, that private markets wouldn't supply well.

Smith's ideas underpin the American value of free enterprise and the argument for limited government in the economy. You'll see them again in debates over economic policy (4.9), where people who favor fewer regulations often draw on Smith, and in how ideology shapes policymaking (4.8). Smith wasn't a believer in no government at all, so be careful not to overstate his position.