You remind me of the definition of an economist: One who wonders if something that works well in practice will work in theory
It is good to see a classical Christian liberal on this forum like a.pole.
In 18th century Britain, Adam Smith knew nothing of what was appropriate for a “modern capitalist society”. He certainly never speculated about the society that he could not foresee in the late 19th century. By then, society had irreversibly changed from the agricultural society Smith knew well (his family were land improving farmers in Fife) into what we now call the industrial revolution.
Smith did not write about ‘capitalism’ – the word was no invented until the 1850s. He wrote about agrarian markets in which commercial markets were reviving after the long centuries of stagnation and decline following the fall of Rome 1300 years earlier.
The education reforms Smith advocated were to serve the needs of the society he knew about, not ‘a modern capitalist’ society that he nothing about. He wrote about the superior education he believed was prevalent in ancient Greece and Rome (Wealth of Nations, V.i.f.: 788) and why the state should fund education of the ‘inferior ranks of people’ to prevent them becoming misled by ‘the delusions of enthusiasm and superstition, which among ignorant nations, frequently occasions the most dreadful disorders’.
He continued:
‘An instructed and intelligent people besides are always more decent and orderly than an ignorant and stupid one. They feel themselves, each individually, more respectable, and more likely to obtain the respect of their lawful superiors. They are more disposed to examine, and more capable of seeing through, the interested complaints of faction and sedition, and they are, upon that account, less apt to be misled into any wanton or unnecessary opposition to the measures of government. In free countries, where the safety of the government depends very much upon the favourable judgement which the people may form of its conduct, it must surely be of the highest importance that they should not be disposed to judge rashly or capriciously concerning it’. (Wealth of Nations, V.i.f.61: 788)
Also Smith did not like corporations much - favoring private ownership and dismissing corporations as an inferior business model.