Economics as Theology: Adam Smith's Wealth of Nations

Abstract

Adam Smith's Wealth of Nations may be read as a work of natural 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.“If a great book such as Smith's Wealth of Nations is read repeatedly, on even a fifth or a tenth reading one continues to learn new things. I doubt whether anyone will ever fully apprehend all the things that Smith wished to express, and there is even more to learn from an interesting mind than its owner wished to teach us.”George Stigler (1982, p. 108)