Economics as Theology: Adam Smith's Wealth of Nations

Abstract

Adam Smith's Wealth of Nations may be read as a work of theology similar in general style to Newton's Principia. Smith's ambiguous use of the word nature and its cognates implies an intended distinction between a positive sense in which natural means necessary and a normative sense in which natural means right. The interest by which humans are motivated is natural in the first sense, but it may not bring about social outcomes that are natural in the second sense. It will do so only if the social institutions within which agents seek their own interest are well formed. Smith provides a large-scale, quasi-historical account of the way in which well-formed institutions gradually develop as unintended consequences of private interest. In so doing, he provides a theodicy of economic life that is cognate with St. Augustine's theodicy of the state as remedium peccatorum.