What's Liberal About Adam Smith's 'Liberal Plan'?
Southern Economic Journal, https://doi.org/10.1002/soej.12601
18 Pages Posted: 25 May 2021 Last revised: 23 Aug 2022
Date Written: July 27, 2022
By the middle of the eighteenth century the word “liberal” had had multiple non-political meanings. Adam Smith famously advances “the liberal plan” of political economy. In The Wealth of Nations he indicates several ways that his liberal plan is “liberal” in a non-political sense. The liberal plan leads to economic growth, which leads to a rise in real wages and population through an extending division of labor. The liberal plan facilitates market integration, leading towards a distribution of food supplies that could be called liberal and generous if it was brought about by design of a distributor. The liberal plan entails a generous view of the person that dignifies the mundane and elevates ordinary work. Considering ways that Smith’s liberal plan is “liberal” shines light on the soul of classical liberal political economy.
Keywords: Adam Smith, the liberal plan, economic freedom, increasing returns to scale, high wages, liberalism
JEL Classification: B12, B31, P16
Suggested Citation: Suggested Citation