Smith's *The Wealth of Nations*: Introductory thoughts

The first book I am blogging is Adam Smith's masterpiece An Inquiry into the Nature and Causes of the Wealth of Nations (1776).

Although it is a coincidence that the book was published in 1776, there is a spiritual synchrony between the publication of this book by a Brit (a Scotsman) and America's independence from Smith's homeland. Indeed, Smith asked Benjamin Franklin to read the manuscript and provide comments prior to publication. Like America's founders, Smith was a close observer of human nature and had a nuanced view about what role the government ought to take in managing society. Both Smith and the founders were Enlightenment creatures through and through. I expect I will be blogging on these political and historical connections as they arise through the book.

Smith was a paradigm shifter in the same way as Newton or Darwin; even more so in some ways, as physics and biology existed in pre-Newtonian and pre-Darwinian states, while there was little systematic pre-Smithian economics beyond intuition and error. Many of the most important ideas in economics come back to his book, the discipline's founding document. I will point out these connections wherever I can.

Not only was Smith ahead of his time, but in some ways he may even be ahead of our own time in economics, with its sometimes-unhealthy focus on optimization and rationality. Smith had a view of human nature that, I think, that stands up well in light of modern science, and a far subtler view of markets than he is often given credit for. This is the primary reason I am blogging through this book, actually. I believe that behavioral economics identifies itself too much as a reaction against neoclassical economics rather than as a body of knowledge in itself. And just as the neoclassical tradition arose ultimately out of Smith's influence (though I doubt he would recognize what it has become), Smith is arguably the intellectual ancestor of today's behavioral economists too. Indeed, I suspect that Smith's synthesis of psychological theorizing and his classical liberal sensibilities led him to insights not appreciated by most behavioral economists. Thus, drawing out the connection between Smith and modern cognitive and social psychology is one of my key objectives.

I am ready with my dusty old copy from the UCL library. I am planning to blog through this book as I read it, with posts when I want to draw attention to a particularly interesting idea or a connection with modern social science. While you are of course free to follow along with me (I will keep you abreast of my progress), my intent is for the posts to be intelligible without reading the book. Happy reading!

Posts so far:

Book I, Chapter 1: Of the Division of Labour

14 Apr 2017: Why we under-appreciate the division of labor

16 Apr 2017: Is science like manufacturing or like farming?

#economics #behavioraleconomics #politics #historyofideas

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