Adam Smith's Big Ideas

(1) The Benefits of Exchange

(a) The Division of Labor

(b) Exchange as Mutual Benefit

(c) The Importance of Money. Compare Locke and Rousseau.

Insight Into A More General Issue:

The Value of Consent/Contract

Smith represents the consequentialist view: The value of consent is explained by its promoting well-being. Kant represents the nonconsequentialist view: The value of consent is the value of autonomy, independent of whether or not it promotes well-being.

(2) The Labor Theory of Value

Nominal Price/Value (measured in money) vs. Real Price/Value (measured in human labor—how?).

This theory will be adopted by Marx.

(3) "Invisible Hand" Explanations

(a) of economic growth (wealth)

(b) biological evolution; moral progress, the development of rights respecting republics, and of an international legal system that establishes perpetual peace (Kant); others?

An Invisible Hand explanation of an effect E is an explanation of how a given process reliably produces E even though no one involved in the process intends to produce E.

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