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.     

From bounties on exportation to the natural and market price of labour: Smith versus Ricardo

Abstract

The scope of this article is to examine the foundations of Smith's arguments and of Ricardo's criticisms on the issue of bounties on exportation. These criticisms are examined in the light of the counter-criticisms provided by a fictitious subject called Smith redivivus. These counter-criticisms highlight Ricardo's neglect of the differences between vérité de raison and vérité de fait and between the points of view of an individual and of society behind Smith's treatment of money vs. real, temporary vs. permanent and natural vs. market price of labour as labour and of commodities as products of labour.     

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.     

J.M. Keynes's Theory of the State as a Path to his Social Economics of Reform in The General Theory

This article focuses on Adam Smith's attitude toward wages as the natural price of labor. It argues that his subsistence wage had similarities with the medieval Schoolmen's notion of the just wage as being established through markets. He further agreed with them that the market wage had to be sufficient to nurture community standards of virtue. His application of the concept differed from theirsn due to his recognition of the problems caused by social distance. In a commercial society, impersonal relations added difficulties to the attainment of a just wage and could diminish virtue. As a result, sympathy from employers and from public

officials was needed as part of the Smithian standard of wages.     

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.     

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.     

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.     

The Scottish Tradition in Economics and the Role of Common Sense in Adam Smith's Thought

This essay examines the notion of a 'Scottish Tradition' and the role of common sense in Adam Smith's thought. It is a contribution to the contemporary literature on the 'Scottish Approach' and on the historical investigation of Adam Smith's intellectual background. It argues that a notion of common sense was behind Smith's view of science and that it may provide an epistemological foundation for the Scottish Tradition. The essay attempts to show how the notion of common sense may be seen as a way of emphasising the role of reason and judgement in the conceptualisation of phenomena with pragmatic and aesthetic content.     

John Stuart Mill on wage inequalities between men and women

Abstract

Mill proposes an analysis of women’s low wages in a paragraph of Principles of Political Economy. The paper’s purpose is to confront this analysis with his conception of justice, rooted in his utilitarianism. Mill’s attachment to justice arises in a particular context, as the result of various intellectual influences. On the one hand, it underlies his concern for the situation of women on the labour market and his insistence on the role played by custom and laws in wage differences between men and women. On the other hand, the shortcomings of Mill’s analysis appear consistent with his vision of equal justice and freedom for women.     

Marx Inside the Circuit: Discipline device,wage bargaining and unemployment in a sequential monetary economy

The aim of this paper is to show that Marxian labour theory of value can be consistently interpreted in terms of the monetary circuit model, where firms need initial finance to start production and where the money supply is endogenous. In contrast to the recently revived Marxian monetary models, in particular the New Interpretation, it is argued here that although the money wage is bargained for on the labour market, the real wage is determined by firms' choices, since firms autonomously determine the structure of production and hence real consumption for the working class as a whole. This does not mean that firms are able to set the real wage without economic and social constraints. Starting from our circuitist reading of the labour theory of value and distribution, a model is developed in order to determine the level of employment and income distribution, on the assumptions that (i) the industrial reserve army affects wage bargaining and labour effort and that (ii) workers react to the failure of their expectations on the real wage by reducing their work intensity. In this context, it is shown that firms may increase their share of profits over time only be means of innovations.     

Utilitarianism and the role of utility in Adam Smith

Abstract

In this paper we confront attempts to bring Smith closer to utilitarianism. We show that Smith's conception of utility is not utilitarian. While the pursuit of ‘pleasure’ could lie behind human behaviour, it is not the pleasure referred to by utilitarianism. Instead, utility, in its colloquial sense, plays a greater role that suggests a type of consideration which is foreign to utilitarianism and which also introduces a rationalist element to Smith's moral analysis. Thus, utility, in the utilitarian sense, is neither a guide to action nor a means for moral evaluation.     

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.     

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).     

Adam Smith on Relations of Subordination, Personal Incentives and the Division of Labour

In elaborating his stadial approach to economic and social progress, Smith placed special emphasis on the evolution of the conceptual pair authority/subordination. The aim of this paper is to analyse the reciprocal relations which link together the evolution of the relations of subordination, personal incentives, and the division of labour with special reference to the agricultural and the commercial stages. In the former case, Smith pointed out the exclusive role performed by personal incentives in increasing labour productivity, a role which is consistent with his manifest preference for the figure of the 'independent small-scale proprietor'. In the latter case we note a change of emphasis due both to the pervasive role of the division of labour in increasing labour productivity, and—as a by-product of this change—to the emergence of a new form of relation of subordination. In this new context the division of labour engenders a new form of property polarisation, one connected no longer to land but to capital accumulation. Moreover, because of its harmful effects on the mental capacity of manufacturing workers, the division of labour appears to act as an obstacle against social mobility, and this in turn further reinforces the process of property polarisation.     

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.     

Culture and Economics: On Values,Economics and International Business

In his Idea of Justice, Amartya Sen compares the two basic approaches to evaluating institutions, transcendental institutionalism and realization-focused comparisons. Referring to Adam Smith's Impartial Spectator, he argues in favor of the latter and proposes the principle of open impartiality. However, this cannot solve the tension between universalism and contextualization of values that Sen has inherited from Smith. Based on recent Hegel scholarship, we argue that some of the difficulties can be resolved, considering the role Smith played in the development of Hegel's thinking. Hegel's concept of recognition plays an essential role in establishing the possibility of impartiality both on the level of consciousness and on the level of institutional intersubjectivity. Hegel's critique of Kant's formalist ethics (also considered as transcendental institutionalism by Sen) and his analysis of the civil society in the Philosophy of Right, especially his focus on associations and Estates, can serve as a model for making Sen's focus on public discourse theoretically more concise and pragmatically feasible. Hegel shows that universalistic attitudes can only emerge in specific institutional contexts.     

Comment on 'Capacity Utilization,Foreign Portfolio Investment and International Debts and Deficits'

The linear structure of the model in Mertzanis (2000) points to errors in his Table 1. In a number of cases, inequality constraints on the model's endogenous variables are violated. Satisfying all constraints imposes restrictions on the model's parameters. The focus here is on wage shares which must be restricted to ensure a meaningful solution. Depending on savings propensities, full utilization of capital at a higher interest rate may require higher rather than lower wage shares in one or both countries.     

Moral markets: A marginalistic interpretation of Adam Smith

The article is built upon James Otteson's analogy between the structure of moral and economic rules. In Otteson's interpretation of Adam Smith's works both of them develop from an exchange of information of interacting agents. We develop that concept about Adam Smith's Theory of Moral Sentiments, analyzing those exchanges, and considering them Moral Market processes, in the Austrian Tradition of markets as processes. We think that Smith's emphasis on graduality and his metaphor of the Impartial Spectator allows us to propose a marginalistic approach to those markets stating how, in some of them which we call moral exchanges of justice, and through a great number of exchanges, moral rules of justice emerge. Finally, we present the problems that arise when legislation tries to change the results of these exchanges, in what we called a price control in the moral market.     

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.     

Adam Smith's Ethics and the “Noble Arts” 1

Adam Smith's character-based ethical system lays the foundation for his vision of the social and economic good. Within this system, the arts perform a critical role. Smith's essays “Of the Imitative Arts” and his Lectures on Rhetoric and Belles Lettres are useful companions to The Theory of Moral Sentiments in analyzing the mechanisms whereby literature and the arts excite moral development. The arts stretch the boundaries of imagination and perspective, stimulating self-awareness and self-reflective growth. When combined with rational thought, decision-making takes place through an internal dialogue in which this wider perspective weighs upon one's “impartial spectator” and becomes the background for action. According to this view, the arts provide positive externalities for society and should be encouraged through public policy. The arts promote a conversation that becomes part of the common goods of society, including that of science.