prior probability

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.

Fred Schauer was a prolific legal scholar (see here). The essays in this special issue of the Virginia Law Review celebrate the life and work of Professor Schauer. Hat tip: Larry Solum

Via Le Monde: “French sociologist, philosopher, and intellectual provocateur Edgar Morin has died aged 104.” (Also, here is the NYT obit.)

Professor Solum featured (and recommended!) my recent work on “The Buchanan-Samuels Exchange” on his Legal Theory blog (see here), where he reports and comments on recent scholarship in jurisprudence and constitutional law. Here is the paper.