What's Liberal About Adam Smith's 'Liberal Plan'?
24 Pages Posted: 25 May 2021 Last revised: 24 Mar 2022
Date Written: February 4, 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, through extending the division of labor, leads to a rise in real wages and population. 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. Smith’s advocacy of the liberal plan evidences his own liberality. It expresses his generous view of the person that dignifies the mundane and looks to enfranchise the previously marginalized. Considering ways in which Smith’s liberal plan is “liberal” shines light on the soul of classical liberal political economy.
Keywords: Adam Smith, the liberal plan, economic freedom, high wages, increasing returns to scale, classical liberalism
JEL Classification: B12, B31, P16
Suggested Citation: Suggested Citation