Vanity and the Daedalian Wings of Paper Money in Adam Smith
NEW VOICES ON ADAM SMITH, Eric Schlieser and Leonidas Montes, eds., London and New York: Routledge, 2006
20 Pages Posted: 17 Dec 2008
Date Written: December 15, 2006
Adam Smith presents a detailed technical analysis of both private and public credit. Many contemporaries, including David Hume, recognized that public credit, and in part private credit, could be used to affect the economy, either for good or bad. Nevertheless, Smith does not seem to recognize the full potential of public credit as a policy instrument whether as a way to stimulate the economy, fine-tune it, or cause economic disasters. The reason for this shortcoming may be Smith's downplaying the desire for power and benevolence as motivational forces in human conduct, due to his emphasis on vanity instead.
Keywords: Adam Smith, paper money, vanity
JEL Classification: B12, E4
Suggested Citation: Suggested Citation