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People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary.

Adam Smith#4

EconomicsLawCompetitionCorruptionRegulation

About this quote

What does it mean?
Competitors often collude to raise prices; laws should not facilitate this.
In plain terms
Businesses in the same trade may conspire against the public.
What can you take from it?
Do not make it easier for competitors to meet.

Where it applies

  • regulation
  • antitrust policy
  • industry meetings

Putting it to work

  • restrict trade associations
  • monitor price-fixing

Questions to consider

  • How do you stop collusion without banning meetings?
  • What protects the public interest?

Another view

Some industry coordination helps safety and standards.

More from Adam Smith

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  3. But man has almost constant occasion for the help of his brethren, and it is in vain for him to expect it from their benevolence only. He will be more likely t…

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