Liberty and Economic Growth in Adam Smith’s Possible World

Constitutional economics proposes and pursues a solution to public-policy problems, one that supplies rules designed to narrow the opportunity set of rational politicians. This work proposes and pursues “rational policy” as a complementary strategy to solve public-policy problems, where rational policy is public-policy that actualizes Adam Smith’s simple system of natural liberty. When individuals pursue their objectives by means of exchange in Smith’s simple system of natural liberty, they foster the growth of per-capita income. By contrast, all limitations on liberty limit the growth of per-capita income. The paper concludes by presenting two implications that follow from these conclusions. JEL classification: B31, H1     

Liberty and national security in Adam Smith’s possible world

Thomas P. M. Barnett argues that globalization’s spread presents the United States and other liberal democracies with two unprecedented national-security problems, and proposes an ambitious military strategy for their solution. This work argues that a successful strategy to solve one of these problems must also include rational policy, public policy that makes Adam Smith’s simple system of natural liberty a reality. Thus, Barnett’s military strategy and rational policy become complementary elements of a more comprehensive strategy to solve this national-security problem. Knowledge that Smith’s simple system of natural liberty moves the world toward peace can create a need for rational policy among voters.

Sentiments and Motivations in Adam Smith and Vernon Smith

Vernon Smith (VS) discovered Adam Smith (AS) late in his professional career, and has adopted ideas from The Theory of Moral Sentiments to explain findings in experimental economics. Most important is the theorized link between moral sentiments and the evolution of property rights and law as foundations for commerce. VS's encounter with AS, while not new, provides a compelling look at the modern laboratory of social science through the lens of the Enlightenment, and cannot easily be encapsulated within a utilitarian framework. This paper provides an overview and commentary on VS's approach.     

The Treatment of Smith's Invisible Hand

Adam Smith used the metaphor of an invisible hand to represent the instincts of human nature that direct behavior. Moderated by self-control and guided by proper institutional incentives, actions grounded in instincts can be shown to generate a beneficial social order even if not intended. Smith's concept, however, has been diluted and distorted over time through extension and misuse. Common misperceptions are that Smith unconditionally endorsed laissez-faire markets, selfish individualism, and Pareto efficiency. The author draws upon recent literature to clarify Smith's meaning and to discuss ways of improving its classroom presentation. The author argues that the invisible hand operates within a variety of institutional settings and that a number of arrangements are compatible with economic progress.     

Visible and invisible order. The theoretical duality of Smith's political economy

The aim of the paper is to show that Adam Smith elaborated a distinctive image of nature related to economic discourse. In Smith, visible events (or interdependencies) must be connected to invisible principles which, in particular, should provide an explanation of the self-coordination processes (especially that of market). In a broad sense, this approach was adopted by a number of disciplines in Smith's time (especially the sciences of life), which focused the analysis of the organization of complex systems. Moreover, the conceptual pair (visibility and invisibility) is connoted in terms of theoretical duality, and the paper attempts to demonstrate how such duality is reproduced in Smith's economic categories.     

Beyond virtues and vices: Antonio Genovesi's and Adam Smith's “science of relationships”

ABSTRACT

Some recent literature has rediscovered the Italian tradition of “civil economy”. This literature has underlined how the discourse about virtues and vices was fundamental in order to establish how, in a political and economic context, a harmonious order could be established. On the basis of this main focus on virtues and vices, it was stated that Genovesi's thought is essentially different from Smith's one. In this article, I argue that the direct focus on questions of virtues and vices does not help capture the novelty introduced by these authors and the relational value of their agency theory.     

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.     

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.     

Fragments of Development: Nation,Gender, and the Space of Modernity

Adam Smith argued that capitalism was best achieved when individuals temper their economic self-interests with ethically grounded motivations. Unfortunately, Smith stopped short of articulating precisely how individuals might manage these seemingly competing interests in a way that is practical for actors in modern day organizations. We believe that a set of effective principles of justice can be found in the writings of political philosopher John Rawls. We argue that due to the empirical realities of entrepreneurs, the entrepreneurial context is aligned with Rawls' original position. We consider how Rawls' principles might inform founders of new organizations with regard to their interaction with organizational stakeholders.     

Material incentives and Kantian optimisation: John E. Roemer on ‘left-right’ economics

Abstract

John Roemer has argued in favour of rehabilitating Kanitanism as an antidote to the kind of utilitarian incentivisation theories associated with neoliberal economics. This article asks whether the ethical thought of Kant is in fact fit for purpose. Placing Kant in dialogue with other contemporary enlightenment thinkers, it also questions whether ‘solidarist’ social theories solve the problems Roemer associates with their ‘selfish’ competitors, and indeed whether the two approaches can be so neatly distinguished.     

Adam Smith and the division of labour: is there a difference between organisation and market?

The paper claims that, in The Wealth of Nations, the divisionof labour refers simultaneously to two different things: a socialdivision of labour and an organisational division of labour.The central point is that the organisation of work (the organisationaldivision of labour) in the firm is the logical counterpart ofthe social division of labour, and that these reflect two inseparableaspects of the process of the division of labour. Smith is thusconcerned with organisations as well as with markets, each functioningaccording to the same principle. Hence, Smith does not believethat the organisational and the social divisions of labour arefundamentally different, although he does recognise some variationbetween them and describes different states of the divisionof labour within the firm, liberal and capitalist.