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.