From 'The Lowest State of Poverty and Barbarism' to the Opulent Commercial Society: Adam Smith's Theory of Violence and the Political Economics of Development

48 Pages Posted: 17 May 2015 Last revised: 18 Jan 2017

See all articles by Barry R. Weingast

Barry R. Weingast

Stanford University, Department of Political Science

Date Written: May 15, 2015

Abstract

What accounts for the differences in the “wealth of nations”; that is, the differing levels of opulence across countries? Adam Smith’s answer is complex and has yet to be fully understood. Moreover, Smith's argument is as relevant today as it was in his time. On the economic side, his answer is well-known: the division of labor, the role of capital accumulation, and the absence laws and regulations that encumber competition and markets. Yet Smith’s views about the failure to develop were not limited to economic issues, instead turning equally to politics and law. Violence is central to Smith's approach to development, and Smith scholars have systematically under-appreciated the importance of violence in his approach to economic and political development. In the face of episodic violence, individuals have little incentives to be industrious, to save, or to invest. Smith argued that development required three mutually reinforcing elements – liberty, commerce, and security. If commerce represents the development of markets, liberty and security provided the political, legal, and military infrastructure necessary to sustain markets in a potentially hostile environment.

Note: Note to reader: This paper has been massively revised. Please view the new version, also available at SSRN, is entitled, "Adam Smith’s Theory of Violence and the Political-Economics of Development.

Keywords: Adam Smith, political economics of development, violence, markets, liberty, and security

JEL Classification: B12, B25, D78, K00, N43, 052

Suggested Citation

Weingast, Barry R., From 'The Lowest State of Poverty and Barbarism' to the Opulent Commercial Society: Adam Smith's Theory of Violence and the Political Economics of Development (May 15, 2015). Available at SSRN: https://ssrn.com/abstract=2606745 or http://dx.doi.org/10.2139/ssrn.2606745

Barry R. Weingast (Contact Author)

Stanford University, Department of Political Science ( email )

Stanford, CA 94305-6010
United States
650-723-0497 (Phone)
650-723-1808 (Fax)

HOME PAGE: http://https://www.stanford.edu/group/mcnollgast/cgi-bin/wordpress/

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