Smith and Newton: some methodological issues concerning general economic equilibrium theory

Abstract

This paper argues that the generally shared interpretation of what can be labelled ‘Smithian Newtonianism’ is spurious on two counts. I suggest not only that Smith was not a Newtonian in the sense that this is commonly understood, but also that Newton was not ‘Newtonian’ either. Specifically, it is argued that neither did Smith have an atomistic‐mechanistic conception of the world like that of neoclassical and modern mainstream economics, and nor did Newton simply conform to the axiomatic‐deductive methodology emulated by economic theory. In particular, Walras's explicit idealism as the architect of general equilibrium theory is contrasted with Smith's evident realism. The latter allows a possible connection between Smith's broader project and critical realism. It is concluded that the popular view of Smith as a forerunner or founder of general economic equilibrium theory must be laid to rest.