Hostname: page-component-848d4c4894-m9kch Total loading time: 0 Render date: 2024-06-07T08:05:37.537Z Has data issue: false hasContentIssue false
  • English
  • Français

ADAM SMITH AND THE NEO-LIBERAL PARADIGM: ON THE ESSENTIAL NATURE OF TRUST, AND REBALANCING CAPITAL

Published online by Cambridge University Press:  16 October 2023

Ronald MacDonald
Ronald MacDonald*
Affiliation:
Adam Smith Business School, University of Glasgow, Glasgow, UK
*
Email: ronald.macdonald@glasgow.ac.uk
Get access Rights & Permissions [Opens in a new window]

Abstract

The key aim of this article is to reassess the societal consequences of the adoption of neo-liberal policies, post-1970, in the light of the writings of Adam Smith. We make two main points: First, the neo-liberal paradigm (NLP) and its characteristics are not the creation of Adam Smith as asserted by leading economists and, indeed, the contrary is very much the case. Second, given this, what does Adam Smith’s work tell us about how we can fix modern-day capitalism broken by the NLP and bring it back in line with Smith’s work?

Keywords

neo-liberalismsocial capitalthe marketthe corporationAdam Smith
Type
Research Article
Information
National Institute Economic Review , Volume 265: Special issue: "ADAM SMITH@300" , Autumn 2023 , pp. 105 - 143
Copyright
© The Author(s), 2023. Published by Cambridge University Press on behalf of National Institute Economic Review

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Acemoglu, D. and Johnson, S. (2023), Power and Progress, New York: Basic Books.Google Scholar
Anderson, G.M. and Tollison, R.D. (1982), ‘Analysis of the Joint Stock Company’, Journal of Political Economy, 90, pp. 1237–56.CrossRefGoogle Scholar
Arrow, K. (1951), Social Choice and Individual Values, New York: John Wiley.Google Scholar
Arrow, K. and Hahn, F. (1971), General Competitive Analysis, San Francisco, CA: Holden Day.Google Scholar
Bachelier, L. (1900), The Theory of Speculation, PhD Thesis, The Sorbonne.Google Scholar
Berry, C.J. (2018), Adam Smith: A Very Short Introduction, Oxford: Oxford University Press.CrossRefGoogle Scholar
Binmore, K. (2000), Game Theory and the Social Contract, Cambridge, MA: MIT Press.Google Scholar
Bowles, S. and Ginitis, H. (2002) ‘The inheritance of inequality’, Journal of Economic Perspectives, 16, 3, pp. 3–30.CrossRefGoogle Scholar
Carney, M. (2021), Values: Building a Better World for All, London: William Collins.Google Scholar
Desai, M. (2021), ‘Of the causes of improvement in the productive powers of labour’, in Shaikh, O. and Wheldon-Bayes, S. (eds), The Wealth of Nations in the Twenty-First Century, Glasgow, UK: Global Ethical Finance Initiative.Google Scholar
Diamond, J. (2019), Upheaval: How Nations Cope with Crisis and Change, London: Allen Lane.Google Scholar
Dockès, P. (1969), L’espace dans la pensée économique, du XVIe au XVIIIe siècle, Paris: Flammarion.Google Scholar
Evensky, J.M. (2011), Adam Smith’s Essentials: On Trust Faith and Free Markets, Syracuse, NY: Syracuse University.Google Scholar
Fama, E. (1970), ‘Efficient capital markets: A review of theory and empirical work’, The Journal of Finance, 25, 2, pp. 383–417.CrossRefGoogle Scholar
Friedman, M. (1970), The Social Responsibility of Business is to Increase Profits, New York Times.Google Scholar
Fukuyama, F. (1999), Trust: The Social Virtues and the Creation of Prosperity, London: Hamish Hamilton.Google Scholar
Fukuyama, F. (2022), Liberalism and Its Discontents, London: Profile Books.Google Scholar
Furubotn, E. and Richter, R. (2000), Institutions and Economic Theory: The Contribution of the New institutional Economics, Ann Arbor, MI: University of Michigan Press.Google Scholar
Gauthier, D. (1986), Morals by Agreement, Oxford: Oxford University Press.Google Scholar
Gray, J. (1986), Liberalism, Milton Keynes, UK: Open University Press.Google Scholar
Hanifan, L.J. (1916), ‘The Rural School Community Centre’. Annals of the American Academy of Political and Social Sciences, 67, pp. 130–8.CrossRefGoogle Scholar
Hardin, R. (1993), Collective Action, Baltimore, MD: The John Hopkins University Press.Google Scholar
Helm, D. (2015), Natural Capital: Valuing the Planet, New Haven, CT: Yale University Press.Google Scholar
Humphrey, J. and Schmitz, H. (1998), ‘Trust and inter-firm relations in developing and transition economies’, Journal of Development Studies, 34, pp. 32–61.CrossRefGoogle Scholar
Ionannou, S. and Wocjcik, D. (2022), ‘Was Adam Smith and economic geographer?’ Geojournal, 87, pp. 5424–34.Google Scholar
Jensen, M.C. and Meckling, W.H. (1976), ‘Theory of the Firm: Managerial Behavior, Agency Costs and Ownership Structure’, Journal of Financial Economics, 3, 4, pp. 305–60.CrossRefGoogle Scholar
Kahneman, D. (2012), Thinking, Fast and Slow.Google Scholar
Knack, S. and Keefer, P. (1997), ‘Does social capital have an economic payoff? A cross-country investigation’, The Quarterly Journal of Economics, 122, 4, pp. 1251–8.CrossRefGoogle Scholar
Levitt, S.D. and Dubell, S.J. (2005), Freakonomics: A Rogue Economist Explores the Hidden Side of Everything, New York: Harper Collins.Google Scholar
MacDonald, R. (2021), How Has Coronavirus Affected Social Capital in the UK?, Economics Observatory.Google Scholar
Malthus, T. (1992), ‘An essay on the principle of population’, in Winch, D. (eds), Cambridge Texts in the History of Political Thought, Cambridge: Cambridge University Press.Google Scholar
Marx, K. (1875), Critique of the Gotha Programme, Wildside Press.Google Scholar
Mayer, C. (2018), Prosperity: Better Business Makes the Greater Good, Oxford: Oxford University Press.Google Scholar
Mazzucato, M. (2019), The Value of Everything: Making and Taking in the Global Economy, London: Penguin.Google Scholar
McCloskey, D. (2021), Bettering Humanomics: A New and Old Approach to economic Science, Chicago: Chicago University Press.Google Scholar
Muth, J. (1961), ‘Rational expectations and the theory of price movements’, Econometrica, 29, 3, pp. 315–35.CrossRefGoogle Scholar
Norman, J. (2018), Adam Smith: What He Thought and Why It Matters, London: Allen Lane.Google Scholar
OECD (2000), OECD Report on Social Capital, Human Capital and Health, Paris: OECD.Google Scholar
Pitt-Watson, D. (2021), ‘Of the nature, accumulation and employment of stock’ in Shaikh, O. and Wheldon-Bayes, S. (eds), The Wealth of Nations in the Twenty-First Century, Glasgow, UK: Global Ethical Finance Initiative.Google Scholar
Ponsard, C. (1983), History of Spatial Economic Theory, Berlin: Springer.CrossRefGoogle Scholar
Putnam, R.D. (2000), Bowling Alone: The Collapse and Revival of American Community, New York, NY: Simon & Schuster.Google Scholar
Putnam, R.D. (2022), The Upswing: How America Came Together a Century Ago and How We Can Do it Again.Google Scholar
Raphael, D.D. and MacFie, A.L. (1976), Introduction to the Theory of Moral Sentiments, Oxford: Clarendon Press.Google Scholar
Rayner, K. (2021), ‘The misinterpretation of Adam Smith: Bringing back the theory of moral sentiments’, in Shaikh, O. and Wheldon-Bayes, S. (eds), The Wealth of Nations in the Twenty-First Century, Glasgow, UK: Global Ethical Finance Initiative.Google Scholar
Rodrick, D., Subramanian, A. and Trebbi, F. (2004), ‘Institutions rule: The primacy of institutions over geography and integration in economic development’, Journal of Economic Growth, 9, 2, pp. 131–65.CrossRefGoogle Scholar
Sachs, J.D. (2020), The Ages of Globalisation: Geography, Technology and Institutions, New York: Columbia University Press.Google Scholar
Sandel, M. (2012), What Money Can’t Buy: The Moral Limits of Markets, London: Penguin.Google Scholar
Sargeant, T. and Wallace, N. (1973), ‘Rational expectations and the dynamics of hyperinflation’, International Economic Review, 14, pp. 328–50.CrossRefGoogle Scholar
Schliesser, E. (2017), ‘Chapter 8: Social institutions and consequentialism,’ in Adam Smith: Systematic Philosopher and Public Thinker, New York: Oxford Scholarship Online.CrossRefGoogle Scholar
Sen, A. (1982), Choice, Welfare and Measurement, Cambridge: Harvard University Press.Google Scholar
Skinner, A.S. (1990), A System of Social Science, Oxford: Clarendon Press.Google Scholar
Smith, A. (1976a), ‘The theory of moral sentiments’, in Raphael, D.D. and Macfie, A.L. (eds), The Glasgow Edition of the Works and Correspondence of Adam Smith , Volume 1, Oxford: Clarendon Press.Google Scholar
Smith, A. (1976b), ‘An inquiry into the nature and causes of the Wealth of Nations’, in Todd, W.B., Raphael, D.D. and Skinner, A. (eds) The Glasgow Edition of the Works and Correspondence of Adam Smith, Oxford: Clarendon Press.Google Scholar
Smith, A. (1978), ‘Lectures and jurisprudence’, in Meek, R.L., Raphael, D.D. and Stein, P.G. (eds) The Glasgow Edition of the Works and Correspondence of Adam Smith , Volume 5, Oxford: Clarendon Press.Google Scholar
Tajima, K. (2007), ‘The theory of institutions and collective action in Adam Smith’s Theory of Moral Sentiments’, The Journal of Socio-Economics, 36, 578–94.CrossRefGoogle Scholar
Taylor, M. (1976), Anarchy and Cooperation, Cambridge: Cambridge University Press.Google Scholar
US Congress Joint Committee (2021), A Policy Agenda for Social Capital.Google Scholar