Belonging, Moral Economy, and Effective Demand: Reinterpreting Adam Smith for Inclusive Development

Carlos Federico Obregon Diaz

MPRA Paper from University Library of Munich, Germany

Abstract: This paper reconstructs Adam Smith’s moral philosophy as a theory of social coordination grounded in moral sentiments and institutional structures, and extends it through the Economics of Belonging. It argues that economic participation depends on structures of belonging that integrate individuals into institutional systems. The paper develops a framework in which effective demand is understood as the economic expression of belonging, and the middle class as its structural carrier. It shows that sustained economic development depends on the expansion of socially integrated participation rather than solely on capital accumulation. The analysis contributes to institutional economics, moral economy, and development theory by providing a unified framework linking ethics, institutions, and macroeconomic dynamics.

Keywords: Belonging; Effective Demand; Moral Economy; Adam Smith; Institutional Economics; Middle Class; Economic Development; Inclusion (search for similar items in EconPapers)
JEL-codes: B12 B41 D64 O11 O15 Z13 (search for similar items in EconPapers)
Date: 2026-04-23
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:128832

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