2.2 — Adam Smith & The Classical System — Readings

Monday, September 14, 2020

Required Readings:

If You Hadn’t Yet:

Though he is admittedly long-winded and lapses between theoretical statements, historical examples, and analogies or current events from the 18th century, Adam Smith is quite easy and entertaining to read. Any educated person should read Smith, and, if you are interested in economics, you should read as much Smith as you can get your hands on. Everything is there (in some form).

Today we will focus primarily on understanding the system of the Classical Economics (so a bit of foreshadowing), as well as Smith’s refutation of mercantilism and physiocracy. As such, in addition to Smith, I will be quoting from Hume and Bastiat regarding their views on mercantilism (see recommended readings below). The quotes from Hume we have already seen.

The reading for Smith comes primarily from Book IV: Of the Systems of Political Oeconomy. These sections are in your Reader (p.165-179). I will also be quoting form Book III when describing the emergence of commercial society out of feudal society. You can find all of The Wealth of Nations online for free here:

Next class we will dive into more of Smith’s analytical insights and the analysis of markets, prices, and economic growth. See the associated readings from WON for next class.

Weingast discusses Adam Smith’s Book III on the economic history of Europe in the context of his views on economic development. Those of you in my Economic Development course should remember this quite extensively:

Below are the readings from Bastiat that I quote. I also make everyone in ECON 306 read (or at least I discuss) Bastiat’s broken window parable in “What is Seen and Not Seen”

As I mentioned in class, you might find How the Dismal Science Got its Name insightful and surprising. It is a 6 part series of blog posts based on research by David Levy & Sandra Peart. - Part I - Part II - Part III - Part IV - Part V - Part VI

The following Wikipedia entries can also provide more background on these writers and their famous works:

Questions to Help Your Reading

Book III

Book IV