Famine: Adam Smith and Foucauldian Political Economy

It is often assumed that the attitudes of the early political economists, such as Smith, to issues of scarcity and famine were dogmatically laissez‐faire. This view has been given fresh impetus by Michel Foucault's recently published lectures on the history of political economy. The article challenges this view. By examining Smith's texts and analyzing the way that Smith was received by critics in the century following the publication of the Wealth of Nations, the article argues that contemporary interpretations of Smith's views on scarcity and famine must be nuanced.     

Vernon Smith's Explanation of Moral Sentiments

This paper is a comment on Vernon Smith's paper, Adam Smith: from propriety and sentiments to property and wealth. This paper argues that while Vernon Smith is correct in his analysis that Adam Smith's theory of human nature, as expressed in The Theory of Moral Sentiments, provides a much more accurate model of behavior than does that of utility maximization, Vernon Smith's analysis can be much enriched by including a more complete explanation of Adam Smith's model of human behavior to include an analysis of prudence, justice, beneficence, and self-command.     

How did it all begin? Adam Smith on the early and rude state of society and the age of hunters

Abstract

Scholars tend to examine Smith's historical approach as a whole from the perspective of the four stages theory. This leads to a neglect of Smith's ability to use history in different ways as his different purposes require. This article distinguishes Smith's recourse to primitive society with respect to his purposes in Wealth of Nations and in Lectures on Jurisprudence. In the former, Smith analyses the capitalist economy, thereby laying emphasis on capital and the division of labour in his account of wealth. In the latter, he explains the evolution of institutions in order to challenge contractarian accounts of government.     

Smith on Ancient Egypt and the Arab Islamic World: A Tale of Two Statist Models

This paper endeavors to portray Egypt, the Arab, and Islamic worlds in the eyes of Adam Smith as implied in his work An Inquiry into the Nature and Causes of the Wealth of Nations from the perspective of the extent and desirability of state intervention in the economy. In other words, the paper attempts to analyze why Smith's stance on ancient Egypt changed from an example of opulence to an eighteenth-century Egypt that—together with other Arab and Islamic countries—represents a model with many challengeable aspects, although the extent of the state action was remarkable in both models, the ancient and the contemporary. Our premise is that Smith did not defend or attack the models based on the extent of state intervention in the economy, but on whether its intervention was conducive to, first, raising the person's well-being and, second, promoting the morals of Smith's “commercial” society.     

Alfred Marshall's use of Adam Smith: Coming to grips with an aspect of Alfred Marshall's citation practice

Abstract

This paper outlines Marshall's use of Smith's writings in his own published work as an aspect of Marshall's citation practice and to demonstrate Marshall's great admiration for Smith as economist. Section 2 reviews the Smith citations in Marshall's Principles of Economics', section 3 those in Marshall's other published work. The conclusion notes that this citation practice matches Marshall's great admiration Smith the economist, because of Smith's great ability to blend fact and theory, for drawing measured conclusions and, above all, for constructing useful arguments in a field of imprecise knowledge.     

An Archaeology of Adam Smith's Epistemic Context

Abstract

Adam Smith played a key role in Foucault's archaeology of political economy. This archaeology, which Foucault accomplished in The Order of Things, is the focus of this article. Foucault may have disagreed with the writings of the classical political economists but he widens our perspective through new possibilities of understanding. It is very illuminating to understand Smith's thinking as following a discursive practice that economic thought shared with the knowledge of living beings (natural history) and language (grammar). Foucault's archaeology highlights some ontological and epistemological conditions that shed light on some of the pillars of Smith's thinking: the centrality of exchange, the division of labour and the labour theory of value. The proximity between Newton and Smith is also examined in ontological and epistemological terms which can be understood through an investigation of that interdiscursivity practice. Beyond testing Foucault's considerations, our aim is to demonstrate their potential for the current scholarship of Smith's works. Foucault's archaeology of knowledge offers a range of elements that warrants greater analysis by historians of economic thought.     

Jacob Viner on Adam Smith: Development and reception of a theological reading

Abstract

Jacob Viner was one of the most important interpreters of Adam Smith's work, particularly for his emphasis in a classic 1927 article on Smith's theological framework, his discussion of the relationship between the Theory of Moral Sentiments and the Wealth of Nations and dismantling of a popular view of Smith as a doctrinaire advocate of laissez-faire. What is less well known is that Viner's theological reading of Smith developed over the next 40 years through intense study of eighteenth century natural theology, and some of his views changed. This article traces the development of Viner's interpretation of Smith. It assesses the suggestion of D.D. Raphael that Smith moved away from a theological framework over time and that Viner repudiated his theological reading of Smith. I argue instead that Viner's mature work broadened and strengthened the theological reading. Much of the literature on Smith and Viner wrongly assumes that naturalistic explanation and theological frameworks are mutually exclusive. This may be the dominant twentieth century view, but it was not so in the eighteenth century, as Viner well understood.     

In defence of Adam Smith's theory of value

Abstract

This paper defends Adam Smith against his critics on his ‘additive’ theory of value as well as his theory of ‘falling rate of profits’. It argues that Adam Smith did not forget the raw materials, and so forth, in his resolution of the price into wages, profits, and rent, and that the constraint binding on the total income was also taken into account by treating rent as the residual. It further argues that there is no fallacy of composition in Smith's explanation for the ‘falling rate of profits’. It was explained on the basis of rising real wages and the farmers’ inability to shift the burden of the rise in wages from profit to rent in the context of a growing economy.     

Jan Tinbergen: A Quatitative Economist ∗

This paper sees a systematic unity between Smith's theological view and scientific study of society. Smith's theological outlook as to a benevolent deity is grasped as a metaphysical doctrine in his system of social science. It arises from the fact that while Smith's opinion concerning God's attributes is established, in the first instance, on the basis of his empirical study of nature, it also stands irrespective of other facts which are not in line with the patterns of order and design. Smith's metaphysical proposition as such is methodologically suggestive in that it proposes theoretical possibilities for progress and harmony and rules out the features of conflict at the analytic level. This implies a difficulty in subscribing to a conventional interpretation that introduces the “two Smiths's” view (the duality of his method and vision).     

All in the best possible taste: Adam Smith and the leaders of fashion

Adam Smith devotes a great deal of attention to the role of fashion in the relationship between the social classes. Smith's general account of fashion is grounded on the transmission of fashion from the rich to the poor. However, when it comes to accounting for the generation of fashion amongst the wealthy class, Smith's account moves away from wealth distinctions and focuses instead on more sophisticated forms of social judgement. This paper examines Smith's general account of fashion between the classes and then identifies the refinements to the account that he provides when he considers the operation of fashion amongst the rich. The paper suggests that the operative distinction among the wealthy is not relative wealth, but rather reputation for taste, and concludes with a discussion of the “man of taste” in Smith's account of fashion.     

From risks to second-order dangers in financial markets: Unintended consequences of risk management systems

This article, along with this special symposium, engages with the lasting significance of Neil Smith's Uneven Development: Nature, Capital, and the Production of Space 25 years after its publication. Few books have made such productive contributions to expanding the horizons of political economy, particularly the spatiality of political economy, as has Uneven Development. This introductory article explores some of these aspects of the book's significance for the readership of New Political Economy; it remarks on the lasting if not growing significance of Smith's intellectual and political contributions two and a half decades after one of his, and the discipline of geography's, crowning achievements. At the same time it foreshadows ways in which the text can continue to push our understanding of the interconnections among nature, capital and the production of space.     

The macrostructure of Adam Smith's theoretical system: a reconstruction

The paper is an attempt to solve - in the style of circumstantial evidence - a few riddles which concern Smith's puzzling ranking of sectors in the fifth chapter of Book II of the Wealth of Nations. In that short (15 pages) chapter ‘Of the different Employments of Capitals’ Smith presents the final element of his theoretical system. The interpretations offered by the modern secondary literature are, as far as I can see, nor correct.

What is Smith's own interpretation? What is his theory behind that ranking? Do his statements really lack consistency? A solution to these riddles can help to clarify Smith's system as a whole and to reconstruct its macroeconomic structure in particular, which is based on a very special but often overlooked conception of sectoral verticality.     

THE TAO OF MARKETS: SIMA QIAN AND THE INVISIBLE HAND1

Adam Smith's famous doctrine of the Invisible Hand, introduced in the Wealth of Nations in 1776, was anticipated by the great Han Dynasty historian Sima Qian (145–87 BC) in his Records of the Historian. Sima Qian's statement is deeper in that, unlike Smith, he links the “invisible hand”’explicitly to the price mechanism. Their analyses had a common philosophical foundation: the characteristically Chinese concept of a general, spontaneous natural order. They arrived at their similar conclusions by applying this concept to a similar contemporary issue in political economy - the appropriate extent of government intervention. More intriguing, if more equivocal, is the possibility of a direct intellectual debt through the agency of A. R. J. Turgot and two Chinese who were visiting Paris as guests of the Jesuits just before Adam Smith's famous visit to the same city.     

Schools Out: Adam Smith and Pre-disciplinary International Political Economy

In this article, I argue that invocations of Adam Smith in international political economy (IPE) often reveal the influence therein of a disciplinary ontological disaggregation of economic and non-economic rationality, which I claim is obscured by the tendency to map its complex intellectual contours in terms of competing schools. I trace the origins of the disciplinary characterisation of Smith as the founder of IPE's liberal tradition to invocations of his thought by centrally important figures in the perceived Austrian, Chicago and German historical schools of economics, and reflect upon the significance to IPE of the reiteration of this portrayal by apparent members of its so-called American and British schools. I additionally contrast these interpretations to those put forward by scholars who seek to interpret IPE and Smith's contribution to it in pre-disciplinary terms, which I claim reflects a distinct ontology to that attributed to the British school of IPE with which their work is often associated. I therefore contend that reflection upon invocations of Smith's thought in IPE problematises the longstanding tendency to map its intellectual terrain in terms of competing schools, reveals that the disciplinary ontological consensus that informs this tendency impacts upon articulations of its core concerns and suggests that a pre-disciplinary approach offers an alternative lens through which such concerns might be more effectively framed.     

Reconciling the Invisible Hand and innovation

It is generally agreed that Adam Smith invoked the Invisible Hand to send the message to posterity that a free-market economy is the best form of economic organization. Strictly speaking, the Invisible Hand of Adam Smith is a conjecture about the virtues of a free-market economy. There are three claims in this paper concerning the interpretation of the Invisible Hand conjecture. First, the neoclassical interpretation engenders a conceptual confusion – identified here as the ‘double paradox’ of the Invisible Hand. Second, the interpretation of Adam Smith's conjecture on the beneficial effects of the free-market economy cannot – and should not – be confined to the production and consumption of existing products. Failure to distinguish the Invisible Hand Theorem from the Invisible Hand Doctrine distorts thinking about Adam Smith's message, creating the misconception that the Invisible Hand passage excludes business innovation. Third, the central message conveyed by Invisible Hand is to be read in the context of modern evolutionary economics.     

Adam Smith's use of multiple references for his pin making example∗

Abstract

At the beginning of The Wealth of Nations Adam Smith describes a pin factory. It is widely accepted that this example comes from Diderot's Encyclopaedia, published in France in the 18th century. The details in the text together with the conferences previously given in Glasgow clearly show that this one reference cannot be the only source. Three other French publications on pin making may also have been used as references for Adam Smith's text. Phrase by phrase these texts are compared to Smith's to support the assertion that he based his work on four previous French publications. The Wealth of Nations unites and synthesizes these different sources and excerpts those parts that confirm his theory. Smith should have listed his sources.     

Economic Efficiency,the Economics Discipline,and the “Affected-With-A-Public-Interest” Concept

This paper examines Adam Smith's explanation of the stability of a competitive market. An initial hypothesis in the paper holds that the mechanism described in The Wealth of Nations has nothing to do with production costs, longterm, or sympathetic relationships. My proposal draws on the literature that evokes the decisive influence, acknowledged by Adam Smith, of institutions over the behavior of individuals. The argument is that Adam Smith's natural rates are a collective pattern that provides the basis for consistent expectations. Smith proposes this pillar to support the construction of a spontaneous order: Coordination through the market is a stable mechanism because it allows for an adjustment of plans grounded in consistent expectations.     

Adam Smith and the “rich country–poor country” debate: eighteenth-century views on economic progress and international trade

Despite his emphasis on economic development, Adam Smith did not participate in the contemporary “rich country–poor country” debate. Some see the absenteeism as a deficiency, while others assume that Smith propounds a theory of uneven development and agrees with the divergence argument. In this article, Smith's own theory is expounded and related to the contentious points of the “rich country–poor country” debate. It is concluded that Smith's theory does not fit easily into the categories of this debate. He rather takes up a third position, being neither a proponent of pure convergence nor of pure divergence.     

The figure of Smith: Dugald Stewart and the propagation of Smithian economics

Despite the persistence of interpretive differences over the substance of Adam Smith's economic and political writings, in the last two decades historians of economic and political thought have done much to establish distinctions between the figure of Smith and the original subject. This paper examines a subset of issues surrounding what we call the Transmission questionnamely, the process which led to the forging of the figure of Smith as the apostle of economic liberalism that he is widely, if not universally, thought to have been. It is not primarily concerned with what Smith actually said but rather with the figure of Smith; with how and why it came to acquire some of its most characteristic feathers under the direction of Dugald Stewart.     

Adam Smith on Monopoly Theory. Making good a lacuna

This article analyses Adam Smith's views on monopoly by focusing on Book IV and V of The Wealth of Nations. It argues that the majority of scholars have assessed Smith's analysis of monopoly starting from premises different from those, actually though implicitly, used by Smith. We show that Smith makes use of the word ‘monopoly’ to refer to a heterogeneous collection of market outcomes, besides that of a single seller market, and that Smith's account of monopolists' behaviour is richer than that provided by later theorists. We also show that Smith was aware of the growth‐retarding effect of monopoly and urged State regulation.