In his new book The Civilization of Commerce (Encounter Books, October 2026), American Institute for Economic Research president Samuel Gregg explores the requirements, benefits, and positive features of a commercial society, which isn’t merely trading and exchanging goods but a civilization of growth in knowledge, specialization, networks, and institutions that is built on tradition, virtue, and law. Moving beyond the usual arguments for free markets, Gregg doesn’t base his case on personal liberty, economic growth, efficiency, and technological sophistication. While these elements are present, Gregg grounds his case in the virtues, traditions, institutions, habits, and mindset of a commercial civilization. The book draws on the case made by Friedrich Hayek and Adam Smith for what they both called “the Great Society.” This commercial society is built on a certain approach to knowledge, dynamism, institutions, and virtue that drives individual and social improvement, all of which contributes to opulence, defined by Smith as “overcoming deprivation.” Such a trajectory also requires a steady adherence to, and a continued building of social and moral capital that no one rationally designed, but that many in the past and present have contributed to and shaped. In this argument, we can trace Hayek’s beliefs and his views as a central figure in the Austrian School of Economics, aspects of the American founding and the nineteenth-century republic, Tocqueville’s musings on democratic society, and most significantly, the influence of the Scottish Enlightenment.

Gregg observes that much of the case for understanding commercial civilization turns on what leading Scottish thinkers identified in their developing society in the eighteenth century: a new type of economic and social ordering that broke with a largely static and, in many cases, impoverished existence. He demonstrates how Friedrich Hayek and Adam Smith’s Great Society liberated people “from economic stagnation and material poverty,” and also elevated “more and more people into a state of higher civilization—a vision of society first given systematic intellectual expression in the movement we call the Scottish Enlightenment.”

Scottish economist and philosopher Adam Smith; Scottish philosopher, historian and economist David Hume; Irish philosopher Francis Hutcheson, known as the father of the Scottish Enlightenment; Judge Henry Home, Lord Kames; Scottish philosopher Thomas Reid, and others, discerned and articulated that openness to economic growth and knowledge, the specialization and mobility of labor, the rule of law, and a desire to improve one’s condition and that of one’s society had given form to a new, expansive mode of existence. Gregg also explains how these dynamic conditions also required virtues of permanence: prudence, humility, and a willingness to trust tradition and customs as the anvil on which individuals, institutions, and law were formed, making commercial society possible because the people who participated in it had been formed in schools of freedom and virtue.

Gregg’s case differs from a standard account that roots the contemporary West in Athens, Jerusalem, and Rome. He doesn’t deny that the civilizations of these cities have made decisive and salutary contributions to the Western mind, but Edinburgh’s addition makes a tremendous difference for understanding commercial society and, I would add, the constitutional state that fosters it. The crucial import here is that much of the modern West incorporated the ideas and habits of mind of the French and German Enlightenments rather than the Scottish Enlightenment. And, over the centuries, it’s the former enlightenments that have come to dominate the West’s thinking and discourse, to its detriment. Followers of these beliefs articulate a rationalist, scientistic approach to knowledge that culminates in the centralization of power, facilitated by a stifling egalitarianism that equates politics and society with only man and the state. The French Enlightenment would have us strip bare institutions, religion, family, and traditions so that individuals may flourish according to their own lights. America’s foundations, however, tap into the roots of Edinburgh and the Scottish Enlightenment, and as of today, have yet to disown it. Ongoing comparisons with the economies and societies of European nations, and even our fellow Anglo-constitutional states, confirm that this has been to America’s great benefit.

Gregg walks us through eighteenth century Scottish jurist Lord Kames’ description of how a commercial society, then emerging prominently in Edinburgh, Scotland, was separate from previous forms of society in the hunter-gatherer or exclusively agricultural modes. A key part of the change is that people find opportunities for broader webs of human contact, breaking down tribe, kin, and village as the locus of relationships. Individuals now produce goods and services for a consuming public, not only local or small groups. Greater opportunity brings movement, specialization in labor and knowledge, and new types of property, as movable property comes readily into creation. People also desire knowledge itself as a good worth acquiring and using proactively. Kames strongly believed that ideas, institutions, and beliefs were just as significant for spurring these changes. Accordingly, law and government were to protect and serve this process of interconnectivity and growth in knowledge by applying rules and enforcement generally, while remaining limited and respectful of rights and liberties. This would allow individuals with “natural liberty,” to use Adam Smith’s term, to pursue the opportunities they identified in their lives for commercial pursuits.

One victory obtained here is how “commercial society helped secure the freedom of the many over and against the power of the few.” This process “occurred without violence or deliberation from above, and often without the need for legislation.” As Hume termed it, it was a “secret revolution.” Adam Smith’s Wealth of Nations aimed to dismantle the mercantilist economic system that dominated Britain, which gave particular corporations state protection at the expense of consumers and the wider public. Today, America should heed his counsel again.

But commercial society wasn’t and isn’t perfect. As wealth grew, inequality, uncertainty, envy, and change in commercial society brought problems. People now had to be able to live in different groups, finding love and belonging in families, communities, and faith while also interacting regularly and fairly with strangers in commercial life. Such a life could bring newfound wealth and opportunity, but also loss, as conditions could change rapidly. Moreover, communities and other sources of meaning could become distant or transformed amid the pressures of a free economy.
Gregg also explores two very different reactions to a commercial society: rationalism and romanticism. Today, both remain part of the contemporary landscape, animating regulatory proposals across the political spectrum. Rationalism posits that the modern economy can ultimately be understood as a science, with reason and policy sophistication providing needed correctives such as equality and social justice. As both Smith and Hayek understood, however, the enticements can be envy, fear, the need for certainty, or egalitarianism, but whatever the attractions, in the end, the project rests on a belief in rationalist planning to achieve ideological ends.

Hayek’s 1974 Nobel Prize lecture was in fact a plea for humility and a rejection of the intellectual heresy of scientism. He addressed the economics profession directly, criticizing its hubris, born of a near-Gnostic certainty about its technical prowess, and said that economists “made a mess of things,” sparking inflation in many economies. To Hayek, they displayed “the ‘scientistic’ attitude,” which built macro policies on the fiction of “a simple positive correlation between total employment and the size of the aggregate demand for goods and services.” What they could not see, indeed did not care to see, Hayek stressed, were the near-infinite number of choices, actions, plans, and commitments of participants in the economy where hiring, pricing, buying, and investing were ultimately determined. These were of far greater significance. In this, Hayek reflected Adam Smith’s critique in The Theory of Moral Sentiments of “the man of system” who believes “that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon the chessboard.” This man, Smith observed, ignored that “every single piece has a principle of motion of its own.”

What should not be passed over lightly, however, is that Smith offered in place of the planner his “man of public spirit,” who exercised public power on behalf of individuals’ liberties and pursuit of gain, however they defined it. He respected the person and the various associations the person belonged to, which were crucial to happiness. This man could appreciate the full depth of civil society, its web of ties and relationships, and what it permitted human beings to do in their various pursuits. Yet our political and intellectual class cannot appreciate this man. Experience has taught them the need for ambitious plans; every economist needs curves to turn dreams into reality. What they measure is beside the point.

The epigraph to the chapter on Romantics quotes German economist Wilhelm Röpke: “Sentimental dreams of community, born of romantic illusions, ignore the hard reality of individual responsibility and economic order.” The romanticist disdain for commerce runs deep in the writings of eighteenth-century philosophe Jean-Jacques Rousseau, Gregg stresses. It rejects the division of labor, which it regards as degrading. It views commerce’s materialism as artificial and evil. And romanticism sees such a society as depriving man of authentic community and spiritual life. These critiques have echoed and been amplified down the generations and centuries of commercial society, forming the ballast of much of the modern left. Rousseau sought to displace such a society by reviving ancient republican virtue with his concept of the general will. Laws formed through the participation of these citizens would unite them into a whole. The nation’s sovereignty would now hold their meaning and identity. Today, this continues to be seen in the contemporary left, which views markets with intense suspicion and constantly seeks to replace them with a spiritualized vision of government as the one thing we all belong to, echoing a prominent view voiced at the 2016 Democratic National Convention.

Yet it’s the nationalist right of the previous decade that has also found succor in such romanticism. As many right-wing nationalists have argued incessantly, the ‘neoliberal’ economy allows corporations to gorge on profits from communities across the country like blood-starved vampires. It follows that America First really means that our economy should be self-sufficient, with little or no international trade. But it’s the real-life economic consequences that always devastate the dreams of both rationalists and romantics. The increase in prices and job losses from two years of tariffs have predictably created the biggest headwinds for the MAGA nationalists, and have done so in the Midwest and Great Plains states where many people work with their hands for a living.

Gregg’s title, in which he uses the term “civilization,” echoes Hayek’s 1960 masterpiece, The Constitution of Liberty, which he dedicated “To the unknown civilization that is growing in America.” Hayek doesn’t define civilization, but, much as Gregg does, underscores the features of a commercial civilization that is built on a foundation of liberty and tradition. Then as now, powerful opponents of such a civilization wanted to tear it down and build their ideologically constructed order. Gregg observes, “For Hayek and Keynes—as well as the founder of modern economics, Adam Smith—the risks were civilizational.” John Maynard Keynes famously moved in the opposite direction to Hayek in his attempts to protect civilization: he advocated widespread fiscal and monetary regulation to rationally control the modern economy. However, both men thought protecting civilization was their foremost concern. They disagreed on what civilization requires to remain sturdy. Keynes, at his zenith of influence as a member of the Bloomsbury set, thought that his civilization needed great change:

Hayek, in critiquing Sigmund Freud, whom he said had launched “the most fatal attack on the basis of all civilization,” added, “what can we expect from a generation who grew up during which the English intellectual scene was dominated by a figure [Keynes] who had publicly pronounced that he always had been and would remain an immoralist.”

Although Hayek deservedly criticized Keynes’ economic program and his rather bohemian approach to tradition and bourgeois norms, Keynes later in his life softened his earlier positions on these matters and recognized the tremendous debts his free society owed to religion and tradition. Gregg quotes Keynes, speaking to T.S. Eliot in 1934, as saying he “would be inclined not to demolish Xty [Christianity] if it were proved that without it morality is impossible.” Gregg also quotes Keynes’ biographer Robert Skidelsky: “As [Keynes] grew older he came to understand the value of conventional behavior, not just as a protection against wickedness and madness, but … the only rational way of behaving in the face of the unknown.” Keynes grew in the direction of Hayek on this point.

Gregg notes that in 1960 America was largely dominated by a managed-capitalism ethos of the New Deal, featuring both an intrusive regulatory state and monetary and fiscal policies owing in many respects to Keynes’ legacy. The American civilization had good bones, but somewhere its growth and progression had taken a wrong turn. Hayek, though, was building for the long term. In books including Law, Legislation, and Liberty, Individualism and Economic Order, and The Fatal Conceit, he reconstructed the arguments that justified civilization and commerce. In a similar way, Gregg writes, “the case for a civilization in which commerce and the workings of many invisible hands are primary fulcrums for excellence and increasing opportunities to pursue happiness.” By doing so, he provides a framework for renewal. Such renewal is sorely needed.

Both major political parties in America and much of the intellectual and activist institutional apparatus that supports them now oppose free markets in principle, rhetoric, and policy. In doing so, they chip away at our commercial civilization. Economies exist as a tool for government to shape its preferred social and cultural order. Tariffs, unions, industrial policy, rampant social spending, and other policies are not new to America, but if not turned back, their road ends in our ruin, and our economic prospects will dim considerably. We ignore the arguments in this book at our peril.