The free market is dead. It was killed by the Bolshevik Revolution, fascist dirigisme, Keynesianism, the Great Depression, the second world war economic controls, the Labour party victory of 1945, Keynesianism again, the Arab oil embargo, Anthony Giddens’s “third way” and the current financial crisis. The free market has died at least 10 times in the past century. And whenever the market expires people want to know what Adam Smith would say. It is a moment of, “Hello, God, how’s my atheism going?”Now I really want to read The Weath of Nations. I have it in the Book List even with a link to the book itself (public domain). Did I mention that Adam Smith is apart of this idea called "Classical Liberalism"? If John Locke discussed more personal or political liberty Smith at least seems to have an interest in economic liberty.
Adam Smith would be laughing too hard to say anything. Smith spotted the precise cause of our economic calamity not just before it happened but 232 years before – probably a record for going short.
Smith was familiar with rampant speculation, or “overtrading” as he politely called it.
The Mississippi Scheme and the South Sea Bubble had both collapsed in 1720, three years before his birth. In 1772, while Smith was writing The Wealth of Nations, a bank run occurred in Scotland. Only three of Edinburgh’s 30 private banks survived. The reaction to the ensuing credit freeze from the Scottish overtraders sounds familiar, “The banks, they seem to have thought,” Smith said, “were in honour bound to supply the deficiency, and to provide them with all the capital which they wanted to trade with.” 
The phenomenon of speculative excess has less to do with free markets than with high profits. “When the profits of trade happen to be greater than ordinary,” Smith said, “overtrading becomes a general error.”  And rate of profit, Smith claimed, “is always highest in the countries that are going fastest to ruin”. 
How then would Adam Smith fix the present mess? Sorry, but it is fixed already. The answer to a decline in the value of speculative assets is to pay less for them. Job done.
We could pump the banks full of our national treasure. But Smith said: “To attempt to increase the wealth of any country, either by introducing or by detaining in it an unnecessary quantity of gold and silver, is as absurd as it would be to attempt to increase the good cheer of private families, by obliging them to keep an unnecessary number of kitchen utensils.” 
We could send in the experts to manage our bail-out. But Smith said: “I have never known much good done by those who affect to trade for the public good.” 
Today we're talking about what this nation should do to handle this economic crisis. The trend unfortunately seems to be that we're not going to leave the market alone. We're using government funds to bailout bad businesses the ones who weren't able to adjust to succeed or at least getting involved in investing in what amounted to be bad lending.
I twittered a link to the Chicago school of economics and I indicated that I have some reading to do. Well at least of that article since it really takes time for me to finish a book (heh I allow myself too many distractions), but at least I have something to look forward to. I understand politics, but economics well my understanding of that field could use some work.
Anyway I inquired to a friend about what should I read if I want to look into Austrian economics. He couldn't tell me about a specific piece telling me that he largely reads stuff off the internets, however, he did suggest that Smith is a good place to start. Although the book itself is only a click away, I should really consider either buying a copy or going to the library and getting it from there.