Adam Smith's Theory of Violence and the Political-Economics of Development

49 Pages Posted: 6 Dec 2016 Last revised: 1 Jun 2017

See all articles by Barry R. Weingast

Barry R. Weingast

Stanford University, Department of Political Science

Date Written: January 16, 2017

Abstract

What accounts for the differences in the “wealth of nations”; that is, the differing levels of opulence across countries? Adam 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; and further, that these conditions first arose in the towns. 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.

Keywords: Adam Smith, poltical-economics of development, violence, markets, liberty, security

JEL Classification: B12, B25, D78, K00, N43, O52

Suggested Citation

Weingast, Barry R., Adam Smith's Theory of Violence and the Political-Economics of Development (January 16, 2017). Available at SSRN: https://ssrn.com/abstract=2881042 or http://dx.doi.org/10.2139/ssrn.2881042

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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