This paper reconstructs Adam Smith’s moral philosophy and political economy as a theory of social coordination grounded in moral sentiments and institutional structures. It challenges the conventional interpretation of Smith as a theorist of self-interested rationality and instead emphasizes the ethical and institutional conditions required for cooperation among free individuals. Building on this reinterpretation, the paper introduces belonging as a foundational concept linking ethics, institutions, and macroeconomic dynamics. The economic agent is redefined as a “self of belonging,” whose capacity to participate in markets depends on both individual capabilities and institutional inclusion. Within this framework, effective demand is conceptualized as the economic expression of belonging, and the middle class as its structural carrier. A formal analytical structure shows that economic growth depends on the expansion of socially integrated participation rather than solely on capital accumulation or technological change. The paper contributes to institutional economics, moral economy, and development theory by providing a unified framework that connects social ontology, institutional structures, and demand-led growth.
Carlos Federico Obregon Diaz (Thu,) studied this question.