In An Inquiry into the Nature and Causes of the Wealth of Nations, Smith gives great value to property rights. The right to have, hold onto, and increase property, is necessary to bring about an increasing wealth of nations. If people have secure property rights, they have reason to improve and increase their property which means investment, and creating employment. A society in which some property owners can become very rich in this way, is more beneficial to everyone, including the poorest, than a society which tries to restrain the wealth of some on the grounds that it takes income from others.
Smith does mention one constraint on acquiring property, and that is a few people owning nearly all the land in a nation. Smith is thinking of Latin America and the land owning pattern left by the Spanish and Portuguese monarchies, who handed out land during the conquest of central and southern America to a few favoured white European associates. There is an obvious contrast with the United States where generations of settlers without political privileges, were able to settle land and create private property. US governments followed a policy of selling land to such people, rather than handing it over to a few associates. This policy itself comes from politicians seeking electoral support, rather than from their pure motives, but that does not stop it from being a good policy.
Smith thinks property rights should be constrained where there is a risk of creating oligopoly in land. This clearly descends from an issue in Locke I have mentioned before, that is the question of how far property in land can go before it harms other people. It seems to me that Locke is satisfied that in an economy in which there is trade, particularly in currency, rather than barter, there is no problem since land is only useful to the owner, if the owner sells its products, adding to the wealth of society by exchanging goods which do not otherwise exist, for the product of other peoples’ work, enterprise and initiative, creating incentives for those valuable things.
However, the exact problem Locke is concerned with is, what happens when the land runs out. This is a different question from, what happens when a few people own most of the land and the government is doing everything to perpetuate that system. Smith is certainly a critic of feudal laws, which push families into only have one heir. This is a way of maintaining the continuity of aristocracy, by either pushing a large proportion of children of the aristocracy out of the aristocratic class, or reducing them to a Don Quixite style of poverty stricken gentility, a real phenomenon in the time of Cervantes.
Smith is extremely cautious about pubic restraints on the accumulation of property, or any kind of economic activity. However, he is not in the camp of those who thin a property right is something which can never ever be limited in any circumstance ever. Given a finite resource, Smith thinks the law should push towards an indeterminate multiplicity of competing agents, rather than a finite permanently defined number of agents.
Is this relevant to an economy where ownership of land is a minor consideration in the accumulation of wealth? The most obvious comparison is producer monopolies, and cartels. Competition, anti-trust, and anti-monopoly law look like the closest comparison. Another issue is intellectual property. From a property rights point of view, it might be desirable to makes sure inventors, and creators, get an economic return for their innovative efforts through patents and copyright, However, from a property rights point of view it might be that intellectual property laws are be a way for some people to take advantage of other peoples’ innovation by creating a monopoly on the use of that innovation by asserting a property right before the real innovator(s) has done so. Anti-monopoly law might help new entrants into the market, or it might be a way for those already in the market to punish the most successful agent rather than innovate to compete.
There’s no quick answer on how to apply Smith’s principles to markets other than land I can think of, as he really thinking of a left over from the feudal system in the case of land. We can definitely say that Smith is against the state granting monopolies, or assuming a monopoly, in any field other than the provision of law and order, and national defence; and is against the state taking intellectual property away from anyone. Maybe this is a question that can only be satisfied empirically by studying the consequences of intellectual property and anti-monopoly legislation. Simply asserting that this or that solution flows from the idea of property itself, justifies conflicting results. I can’t see that Smith ever tried to justify property rights as a quasi-religious absolute; I think his argument relies much more on what emerges from history and the best results for the advance of liberty and culture, which will always include commerce, but may leave the rules and laws of commerce open..