CHASTER VII

THE ECONOMIC ACTIVITIES
OF GOVERNMENT

The Post Office

The Ministry of Transport

The Ministry of Agriculture and Fisheries

The Board of Trade

Conclusions

"The third and last duty of the Sovereign or Commonwealth,"
wrote Acjain Smith, after he had dealt with Defence and Justice,
"is that of erecting and maintaining those public institutions
and those public works which, though they may be in the
highest degree advantageous to a great society, are, however,
of such a nature that the profit could never repay the expense
to any individual or small number of individuals, and which it
cannot therefore be expected that any individual or small number
of individuals should erect or maintain. The performance of
this duty, too, requires very different degrees of expense in the
different periods of society". Adam Smith was a champion of
private enterprise, but he realised that it cannot work unless
the State provides it with a framework of public institutions,
of which a system of roads, and lighthouses, are obvious examples*
It is also dear from the last sentence quoted that Adam Smith
saw the Government activity of this kind would grow* Since
his day there has been an increase of services, such as railways
and electricity, for which complete competition is not an efficient
form of organisation; and the State has extended its control
to protect the public from private monopoly. Further, as has
been noticed in the discussion of the Treasury, the growth
of large-scale business draws the State more and more into

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