The article describes two contrasting developments of Adam Smith's ideas. Condorcet, following Turgot's reforms of the 1770s, described a theory of social equality based on free competition, public instruction, and social security, and proposed a system of social insurance establishments. Malthus in his Essay on Population criticized Condorcet's ideal of social security, arguing that social insurance would reduce industry and lead to increased population. The conflict over fear versus confidence as incentives to industry was of central importance to subsequent disputes in political economy. These disputes are enlightening, it is suggested, for modem problems. They cast doubt, first, on the presumption that social security is inimical to economic development. Second, while they provide some support for the modem view that social security tends to reduce fertility, they suggest that this effect is associated more generally with social and political equality. Third, they suggest that the politics of laissez faire is compatible with criticism both of government and of powerful corporate and local institutions.