prior probability

To commemorate the 250th anniversary of the publication of Adam Smith’s Wealth of Nations, I have been featuring each of the sections of Smith’s magnum opus on my blog. Below, for example, is a compilation of my previous blog posts on Book IV of The Wealth of Nations:

1. Adam Smith calls bullshit!
2. Adam Smith on the economics of war
3. Some final thoughts on Book IV, Chapter 1 of The Wealth of Nations
4. Adam Smith’s finest chapter
5. Whose hand?
6. Adam Smith, anti-racist
7. Adam Smith, the Bank of Amsterdam, and the fetish of trade balances
8. Some final thoughts on Book IV, Chapter 3 of The Wealth of Nations: of absolute advantage
9. Adam Smith the pragmatist
10. Adam Smith’s critique of crony capitalism
11. Adam Smith’s paradoxes
12. Adam Smith’s subtle critique of bilateral trade treaties in Book IV, Chapter 6
13. Adam Smith’s detour on seignorage
14. Adam Smith’s scathing critique of Spanish colonialism
15. Adam Smith’s scathing critique of European colonialism more generally
16. Top Ten Plays in Part 3 of Chapter 7 of Book IV of The Wealth of Nations
17. Das Adam Smith Koloneiproblem
18. Adam Smith’s scathing critique of the East India Company’s double monopoly
19. The true villains in The Wealth of Nations
20. Doctor Quesnay’s fallacy
21. In praise of natural liberty: some closing thoughts on Book IV of The Wealth of Nations

In all, I wrote up 21 separate blog posts on this part of Smith’s treatise between 9 February and 5 March of this year. (See also here, here, and here for compilations of my previous posts on Books I to III of The Wealth of Nations.) Bonus link: You can order an “Adam Smith Wealth of Nations Great Books Graphic T-Shirt” (see below) here, via Liberty Maniacs.

That is the title of this beautiful novella by Mark Richard Robinson, who I had the honor of befriending in Broxbourne, England, these past few days. Update (3:00 pm GMT): I have now finished reading the good Reverend Robinson’s poignant and pensive work of autobiographical fiction. He not only addresses an important philosophical question — the relationship between faith and belief — his work is also a modern-day sequel to two of Seneca’s most timeless essays: “On the Shortness of Life” and “On Providence“. (As a literary aside, I would also have loved to read Robinson’s story from the perspective of his adulterous colleague!)

As a follow-up to my previous two posts (see here and here), I want to pose another question to my fellow admirers and students of Adam Smith, another fundamental “Adam Smith problem,” so to speak. In Book III of The Wealth of Nations, Smith traces the progress and prosperity of Europe from the fall of the Roman Empire, and he notices a broad but inexorable historical pattern: the presence of law and liberty in urban areas and the absence of law or liberty in rural areas, or in the immortal words of Adam Smith, “Order and good government, and along with them them liberty and security of individuals, were … established in cities at a time when the occupiers of land in the country were exposed to every sort of violence.”

For Smith, in short, European cities became prosperous because of two key ingredients: law and liberty, both of which combine to produce economic prosperity. Although my own view is that Smith’s historical conclusion is correct, we must now consider a causal question in addition to the delicate line-drawing question I posed in my previous post. Simply put, what if the arrow of causality is the other way around? What if economic prosperity produces some combination of law and liberty? Or in the alternative, what if it’s another independent variable — say, something like “culture” — that is doing all the causal work?

Continuing with my series of blog posts commemorating the 250th anniversary of the publication of Adam Smith’s Wealth of Nations, below is a compilation of my previous blog posts on Book III of Smith’s magnum opus. (Nota bene: Book III is the shortest part of Smith’s treatise, so I was able to cover this ground in just four posts.)

1. Adam Smith on the gains from trade
2. Adam Smith’s timeless critique of feudalism and slave labour
3. Adam Smith on liberty and good government
4. Adam Smith’s revolution

Following up on my previous post, I want to share two major Smithian themes from my rereading of Book 2 of The Wealth of Nations as well as pose a question to students of Adam Smith:

1. Theme #1. Economic liberty is crucial. As a general rule, people should be free to pursue their private interests, and the government does more harm than good when it protects its domestic market from foreign competition or by otherwise impeding the free flow and movement of goods and services.
2. Theme #2. But so too is law. Every rule — even Smith’s general rule in favor of liberty — has to have an exception, right? Smith, for example, is willing to tolerate some restrictions on liberty, such as the elimination of small denomination bank notes and the legal regulation of interest rates, when those restrictions promote the general welfare or otherwise protect a larger group of people from harms caused by a few.
3. The Adam Smith Question. These two themes combine to produce what I consider to be the real Adam Smith problem: how can we prevent Smith’s pragmatic exception from swallowing up his general rule in favor of liberty? That is, where should we draw the line between law and liberty?

To commemorate the 250th anniversary of the publication of Adam Smith’s Wealth of Nations, I will be presenting my forthcoming book Beyond the Adam Smith Problem (with Salim Rashid) and attending two conferences overseas: one in Paris (10 June); the other in Glasgow next week (17-20 June). In addition, I will also be featuring a different part of Smith’s magnum opus on my blog. (See here and here for my previous blog posts on Book I of The Wealth of Nations.) Below is a compilation of my previous blog posts on Book II of Smith’s treatise:

1. Adam Smith, father of development economics
2. Law, liberty, and Adam Smith
3. Adam Smith’s master class on money
4. Adam Smith’s survey of money substitutes
5. Adam Smith, the father of government regulation?
6. Another Adam Smith distinction: productive and unproductive professions and pursuits
7. Adam Smith’s secret sauce
8. Adam Smith forever!
9. Adam Smith on interest rate selection bias: Book II, Chapter 4
10. Adam Smith on capitalism and freedom: Book II, Chapter 5

1. Reims (Wikipedia)
2. Reims and Amiens (Tyler Cowen)
3. Bubbly, Historic Reims: The Toast of France’s Champagne Country (Rick Steves)
4. French fancies: Champagne Veuve Clicquot Ponsardin (Sheree)
5. Bonus link: Returning to Reims (memoir by Didier Eribon)

Salut, mes amis! After two days in Riems, France (8-9 June), I will be attending a conference in Paris on Adam Smith’s Wealth of Nations on Wednesday afternoon, 10 June. Details are available here.