Adam Smith in his time and ours: reflections on economic ideas, history and policy

This paper is concerned with the relationship between the history of economic thought, economic history and economic policy with a particular focus on interpretations of Adam Smith and his example as an economic historian. Smith was far from the prophet of self-interest described by George Stigler. Ironically, while Stigler’s influential characterisation of Smith was partial, his own discussions of interests and capture is far more Smithian. Smith viewed the Wealth of Nations as an aid to government officials, an “improvability thesis”. The contemporary literature in Applied Economic History (AEH) is discussed as it relates to Smith’s example.Smith… was not a doctrinaire advocate of laissez-faire. He had an inherent suspicion of the ability of government to manage economic affairs properly, but he also recognised that there were various policy actions that could improve national welfare, and that the ability of government officials to govern wisely could be improved if they were properly instructed…It was not government that Smith opposed…What Smith was after was the appropriate set of policies that, working in tandem with the self-interest that he believed governed behavior in the economic realm, would facilitate the growth of national wealth (Medema, 2009, p.25).Smith pushed back against the idea that the wealth of a nation should be measured in how much gold it had, or the riches of a few select merchants…Smith also highlighted the dangers from elites - and big business - in capturing and exerting undue influence over economic policy. In his day it was the East India Company. Today, it might be the concern that economists have over the influence of multinationals and digital oligarchs, and the continued power of patronage (Roy, 2023, p.43).