Adam Smith and the Moral Foundations of Political Economy

Alessandro Roncaglia
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Alessandro Roncaglia: Sapienza University of Rome

No inetwp251, Working Papers Series from Institute for New Economic Thinking

Abstract: Adam Smith's political economy is best understood as part of a broader inquiry into human beings and society, rather than as a narrow theory of market self-regulation. This paper situates The Wealth of Nations within Smith's wider intellectual project, including his writings on moral philosophy, rhetoric, jurisprudence, and scientific method. It emphasizes the complementarity between self-interest and sympathy, the centrality of the division of labor to Smith's theory of economic development, and the role of institutions, justice, and public action in sustaining commercial society. The paper also revisits Smith's theories of value, prices, distribution, and competition, arguing against interpretations that assimilate Smith to modern general equilibrium theory or reduce the "invisible hand" to a doctrine of automatic market optimality. Smith emerges instead as a theorist of social interdependence, historical development, and institutional complexity.

Keywords: Adam Smith; classical political economy; Scottish Enlightenment; division of labor; sympathy; self-interest; value theory; competition; invisible hand; history of economic thought (search for similar items in EconPapers)
JEL-codes: B12 B31 B41 D01 D46 D6 E6 K21 L4 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2026-05-25
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Persistent link: https://EconPapers.repec.org/RePEc:thk:wpaper:inetwp251

DOI: 10.36687/inetwp251

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