What's Liberal About Adam Smith's 'Liberal Plan'?

Forthcoming in Southern Economic Journal

51 Pages Posted: 25 May 2021 Last revised: 28 Jul 2022

See all articles by Erik W. Matson

Erik W. Matson

Mercatus Center at George Mason University

Date Written: July 27, 2022

Abstract

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

Matson, Erik W., What's Liberal About Adam Smith's 'Liberal Plan'? (July 27, 2022). Forthcoming in Southern Economic Journal, Available at SSRN: https://ssrn.com/abstract=3852198 or http://dx.doi.org/10.2139/ssrn.3852198

Erik W. Matson (Contact Author)

Mercatus Center at George Mason University ( email )

3434 Washington Blvd., 4th Floor
Arlington, VA 22201
United States

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