Adam Smith on the value of self interest and the injustice of goverment trying to thwart it

See Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (Cannan ed.), in 2 vols. [1776] from Online Library of Liberty. I wanted to post this because of my post on the decline in ESG from a few days ago. The idea was to emphasize that businesses don't have to try to improve society to make it better off and this invisible had philosophy does not apply only to international trade. What Smith says here sure sounds like the invisible hand.

From Volume 1.

"Every individual is continually exerting himself to find out the most advantageous employment for whatever capital he can command. It is his own advantage, indeed, and not that of the society, which he has in view. But the study of his own advantage naturally, or rather necessarily leads him to prefer that employment which is most advantageous to the society."

From Volume 2.

"It is thus that the private interests and passions of individuals naturally dispose them to turn their stock towards the employments which in ordinary cases are most advantageous to the society. But if from this natural preference they should turn too much of it towards those employments, the fall of profit in them and the rise of it in all others immediately dispose them to alter this faulty distribution. Without any intervention of law, therefore, the private interests and passions of men naturally lead them to divide and distribute the stock of every society, among all the different employments carried on in it, as nearly as possible in the proportion which is most agreeable to the interest of the whole society."

"To prohibit a great people, however, from making all that they can  of every part of their own produce, or from employing their stock and industry in the way that they judge most advantageous to themselves, is a manifest violation of the most sacred rights of mankind."

 See The State of ESG Investing: How Dire Is It?

"Investing based on environmental, social and corporate-governance factors has taken a hit over the past several years amid a backlash against so-called woke policies and weakness in ESG funds’ performance." 

The Seasonally Adjusted CPI Was Down .422% in June

Here are the changes in the seasonally adjusted CPI for the six months ending in May: 

Dec. 0.2978%

Jan. 0.1708%

Feb. 0.2670

March 0.8651%

April 0.6400%

May 0.4729 

 

The last decline before June this year was June 2024 when it was -0.042%.

 

See Consumer Price Index for All Urban Consumers: All Items in U.S. City Average from FRED (Federal Reserve Economic Data) compiled by the Research Division at the Federal Reserve Bank of St. Louis for data on the seasonally adjusted CPI.  

That site shows a graph but if you click on the Download button you will get the actual numbers in Microsoft Excel.

The Consumer Price Index for All Urban Consumers: All Items in U.S. City Average (CPIAUCSL) was 333.979 in May and 332.568 in June. Since 332.568/333.979 = 0.99578, that means it was down 0.422% since 1 - .99578 = 0.422. If we had that every month for 12 months the CPI would be down 4.95%. 

 

It was 321.435 in June 2025. Since 332.568/321.435 = 1.0346, that means it was up 3.46% over the last 12 months.

The non-seasonally adjusted CPI was 333.952 in June and 322.561 in June 2025. That was up 3.53%. So pretty close to the seasonally adjusted CPI. This is well above the Fed's target of 2.0% (although they prefer to use the Personal Consumption Expenditures Price Index which was 4.1% higher in May 2026 than May 2025).

 

For more information see Consumer prices rose 3.5% annually in June, less than expected as energy prices eased by Jeff Cox of CNBC. Excerpt: 

"Consumer prices posted their biggest decline in more than six years during June as a sharp swoon in energy prices provided at least temporary relief from this year’s inflation surge, the Bureau of Labor Statistics reported Tuesday.

The consumer price index, a broad measure of costs for goods and services across the U.S. economy, was lower than expected across the board. The CPI fell a seasonally adjusted 0.4% for the month, bringing the annual inflation rate down to 3.5%."

 "Core inflation, which excludes food and energy, was flat on the month, putting the 12-month rate at 2.6%. The consensus forecast was for respective increases of 0.2% and 2.9%, following a 2.9% May level."

The article also discusses what types of products are going up in price and what is going down. There is a graph of the monthly year-over-year percent change in prices and core prices going back almost 4 years.    

Related material: 

Consumer Price Index for All Urban Consumers: All Items Less Food and Energy in U.S. City Average (CPILFESL) This is also from from FRED (Federal Reserve Economic Data), compiled by the Research Division at the Federal Reserve Bank of St. Louis. It has the seasonally adjusted core CPI.

 

Consumer Price Index Data from 1913 to 2025

 

Personal Consumption Expenditures Price Index 

 

The Bureau of Labor Statistics makes seasonal adjustments. See Consumer Price Index Summary.

 

The table below has the annual inflation rate since 1914 in the columns labeled CPI %Ch. or CPI percentage change. It is from Consumer Price Index Data from 1913 to 2026 and is not seasonally adjusted. It is also the December to December change in the CPI. That site also looks at how the 12 month average for the CPI changed from one year to the next. 

 

Year	CPI %Ch.		Year	CPI %Ch.		Year	CPI %Ch.		Year	CPI %Ch.
1914	1		1944	2.3		1974	12.3		2004	3.3
1915	2		1945	2.2		1975	6.9		2005	3.4
1916	12.6		1946	18.1		1976	4.9		2006	2.5
1917	18.1		1947	8.8		1977	6.7		2007	4.1
1918	20.4		1948	3		1978	9		2008	0.1
1919	14.5		1949	-2.1		1979	13.3		2009	2.7
1920	2.6		1950	5.9		1980	12.5		2010	1.5
1921	-10.8		1951	6		1981	8.9		2011	3
1922	-2.3		1952	0.8		1982	3.8		2012	1.7
1923	2.4		1953	0.7		1983	3.8		2013	1.5
1924	0		1954	-0.7		1984	3.9		2014	0.8
1925	3.5		1955	0.4		1985	3.8		2015	0.7
1926	-1.1		1956	3		1986	1.1		2016	2.1
1927	-2.3		1957	2.9		1987	4.4		2017	2.1
1928	-1.2		1958	1.8		1988	4.4		2018	1.9
1929	0.6		1959	1.7		1989	4.6		2019	2.3
1930	-6.4		1960	1.4		1990	6.1		2020	1.4
1931	-9.3		1961	0.7		1991	3.1		2021	7
1932	-10.3		1962	1.3		1992	2.9		2022	6.5
1933	0.8		1963	1.6		1993	2.7		2023	3.4
1934	1.5		1964	1		1994	2.7		2024	2.9
1935	3		1965	1.9		1995	2.5		2025	2.7
1936	1.4		1966	3.5		1996	3.3
1937	2.9		1967	3		1997	1.7
1938	-2.8		1968	4.7		1998	1.6
1939	0		1969	6.2		1999	2.7
1940	0.7		1970	5.6		2000	3.4
1941	9.9		1971	3.3		2001	1.6
1942	9		1972	3.4		2002	2.4
1943	3		1973	8.7		2003	1.9

 

Here is a timeline graph of this data: