Smith's Wealth Research Articles

The common law and Adam Smith's Wealth of Nations

The common law and Adam Smith's Wealth of Nations

The Development of the Discourse Surrounding ‘Social Improvement’ during the Anglo-Irish Trade Dispute, 1695–1800

The idea of social improvement, including the concept of ‘reciprocity’, had substantially been developed in the Anglo-Irish trade disputes since the late seventeenth century. Towards the end of the eighteenth century, however, commentators became more sceptical of ‘reciprocity’. The Irish reception of Adam Smith's Wealth of Nations must be situated in this historical context, and the article explores the implications of the relevant discourses for John Robertson's concept of Enlightenment. Like in Scotland, ‘improvement’ was considered significant in eighteenth-century Ireland. Nevertheless, political economy played different roles in the two nations because of their different political systems and circumstances. Many, including Adam Smith, believed that political and constitutional, rather than economic, reforms would be more crucial to improving Irish society.

By the same author: Presenting Adam Smith's works as a whole

AbstractIn the first edition of Adam Smith's Wealth of Nations, published in London in 1776, the ‘by the same author’ list is presented in a very unusual place: directly opposite the table of contents. That placement suggests a continuity and unity in Smith's published works. A photograph provides a touchstone to discuss: (a) the Language essay, (b) the full title of The Theory of Moral Sentiments, and (c) Wealth of Nations under the ethical umbrella of Moral Sentiments.

Global production aspirations and internationalization by state-owned enterprises: A Co-evolutionary view of state-driven industrialized economy

The study aims to explore whether internationalization by state-owned enterprises is a curse or blessing in the context of aspirant industrial economies, such as China. What do state-owned enterprises' global production aspirations, such as outward foreign direct investment, bring into their home country? To answer this question, this study proposes a unique, co-evolutionary perspective of the state-driven industrialized economy by leveraging insights from economic discoveries such as Adam Smith's wealth of nations, David Ricardo's comparative advantage, and Michael Porter's competitive advantage. This view suggests that an outward foreign investment strategy may likely provide state-owned enterprises with access to resources and advanced production technologies, enhance innovation capabilities, gain more competitive advantage, and achieve superior performance, thus leading to spillover effects on their home country's wealth, comparative advantage, and competitiveness. This study discusses China's grand policies, economic performance, and successful cross-border industrial acquisitions.

FramingThe Wealth of Nations

AbstractWhen The Wealth of Nations was published in 1776, this was recognized as another work by the author of The Theory of Moral Sentiments, a work that Smith extended and revised through six editions until the year he died, in 1790. Smith had in 1776 refrained from elaborating arguments that he had already made in 1759, and this was likely well understood by his contemporaries. But by the later 1790s The Theory of Moral Sentiments was no longer so widely read and was becoming regarded as dated in its approach. Smith had located the nature and causes of the wealth of nations in human attributes and prudent policy; detached from the context provided by The Theory of Moral Sentiments, The Wealth of Nations was now treated as a repository of economic principles that required criticism and correction. It was quickly converted into the founding text of a new political economy, exemplified by the French translation by Garnier (1802), Jean-Baptiste Say's Traité (1803), and of course David Ricardo's Principles (1817). Political economists of the early nineteenth century disregarded most of those features of The Wealth of Nations that have since the later 1970s been reemphasized by new scholarship; that the Glasgow edition began publication for the 1976 bicentenary of The Wealth of Nations was at the time thought only fitting for a writer then treated as the property of economists. But by comparing Ricardo's Principles with Smith's Wealth of Nations we can better understand that this foreshortened appreciation of Adam Smith's work has a longer history than usually thought.

Smith or Malthus? A Sea‐Change in the Concept of a Population

AbstractThis two‐part article offers a critical appreciation of Malthus's political economy of population to mark the bi‐centenary of his Principles of Political Economy (1820). His general economic theory emerged after the first four editions of his famous Essay, in three steps: (1) a rapidly produced series of essays on tariffs, rents, and capital mal‐distribution (1814–1815); (2) consequent revision of the economic basis of the Essay (1817); and (3) formal statement in the Principles. His main economic writings thus belong to a later, more mature period of his work, and their evolution is of particular interest for demography on three counts. One is that his rethinking was stimulated directly by the need to rectify serious deficiencies he had come to recognize in the Essay. Second, this makes his later thought of more direct interest to today's study of population and development. Third, all three steps began in, and were sustained by, dialogue with Adam Smith's Wealth of Nations. The dialogue led to further thinking beyond the Essay, with major innovative developments. Comparison to the Smithian baseline shows (1) that the familiar stereotype of Malthus as prophet of population‐laden disaster is seriously incomplete; and (2) capital distribution replaces population distribution as a mechanism of growth, inducing a radical change in the concept of population.

The Routledge Guidebook to Smith's Wealth of Nations

The Routledge Guidebook to Smith's <i>Wealth of Nations</i>

Thematic Exploration of Corporate Social Responsibility (CSR) Issues: Origins, Twists and Turns, and Evidence from Nigeria’s Oil and Gas Industry

This paper discusses the corporate social responsibility, its origins, twists and turns, as well as some impacts and evidence from oil and gas industry in Nigeria. Efforts were made in capturing and integrating some global evolutionary and historical phases of attitudes towards social responsibility starting from Adam Smith's (1776) wealth of Nations perceptions, Milton Friedman (1970), Carroll (1991), Claydon (2011), and recent perspectives. Some areas relating to corporate social responsibility debate, and the views reconciliation were examined. Empirical evidences from oil and gas companies' corporate responsibility positive impacts on host communities lives were also explored and statistically examined. We conclude amongst others that corporate social responsibility engenders mutual cooperation and socio-economic development. Corporate organizations should be environmentally sensitive and people-friendly, such helps to minimize conflicts and enhancement of operational environment sustainability as recommended herein.

What did Adam Smith learn from François Quesnay?

Book IV of Adam Smith's Wealth of Nations concerns two rival economic theories, Mercantilism and Physiocracy. The latter, François Quesnay's system, occupies only the ninth and final chapter, and it begins with a stunning dismissal. Yet, fifteen pages later, Smith praises this theory to the skies. That cries out for explanation. Like Mercantilism, Smith's system emphasizes commerce, whereas Quesnay's is confined to agriculture. But like Physiocracy, Smith's system is built on individual liberty, whereas Mercantilism is one of government control. Despite his initial put-down, Smith is naturally inclined more toward Quesnay's philosophy. And the main thesis of my paper is to suggest one reason for this that has not previously been brought to light, and that can explain Smith's extravagant praise for it. Quesnay employs a Newtonian scientific method different from the one emphasized in Smith's early ‘Astronomy’ treatise, a method Smith first prominently introduced a decade after his meetings with Quesnay, in Wealth of Nations and Smith's eulogy for Hume (1776), and in the sixth (1790) edition of his Theory of Moral Sentiments.

Social coordination problems in classical and Marxian political economy

This paper explores the application of information theory and game theory to questions arising in Adam Smith's Wealth of Nations and Karl Marx's critical reformulation of Smith's analysis in Capital. After introducing the key theoretical concepts of entropy-constrained behavior and the social interaction model, the paper applies them to some central issues in Marxian and classical political economy: the long-period method analysis of commodity production, the social division of labor, commodity production and money, alienation, and the tendency for the rate of profit to fall.

Adam Smith's Wealth of Nations after 240 Years: It Is still the Work of an Intellectual Giant Towering Heads and Shoulders Above the Benthamite Utilitarian Economists of the 18th, 19th, 20th and 21st Centuries

Adam Smith’s major intellectual breakthroughs in decision making under uncertainty, interval valued probability, imprecise probability, money, banking and credit, and economic growth are still not understood, much less appreciated or recognized, some 240 years after the publication of the first edition of The Wealth of Nations by economists in general. The reasons for this are not hard to discern. First, Adam Smith totally and completely rejected any kind of microeconomic theory based on utility maximization. Smith, like Aristotle before him and Keynes after him, rejected the claim that rationality is consistent with and illustrated by Max U thinking. Thus, economists who criticize Smith’s theory of value, such as George Stigler, a well known Benthamite Utilitarian economist, because it does not conform or reflect their own extremely narrow focus of the role of the calculus of probabilities in economic decision making, can be safely ignored. Stigler attempted, like so many economists have done, to reinterpret Smith, as he did with F. Knight, through the lens of Subjective Expected Utility (SEU) theory, which is the modern version of Benthamite Utilitarianism. This leads to our second point. Smith was the first to recognize the impact and pervasive role that uncertainty played in decision making, life, taxation, government policy concerns, economic growth, as well as in issues involving banking, money and credit and the problems of deflation and inflation. This put Smith on a collision course with Jeremy Bentham and the economics profession, where uncertainty not only played no role at all, but could never play any role at all. In fact, uncertainty can’t even be admitted to exist by any utilitarian, because then it becomes impossible for any decision maker to calculate the odds that a particular action will lead to certain consequences that are very likely to be beneficial to the decision maker. Given that only consequences matter for utilitarians, and nothing else, for a utilitarian, then the fact that such consequences, and their probabilities, can’t be calculated using the mathematical laws of the probability calculus means that their ethical system has collapsed. Third, Smith recognized, like Aristotle and Plato did before him and Keynes after him, the extreme importance of controlling the banking system in order to prevent some upper income class individuals, who Smith labelled as “projectors, imprudent risk takers and prodigals (Keynes’s rentiers and stock, real estate and money market speculators)” from leveraging their debt positions through the use of bank loans so as to try to earn a return without the production of any actual or physical consumption or investment good. The end result would be a series of financial panics and bubbles that would lead to deflation and inflation. Smith’s ultimate goal in the Wealth of Nations was to create a virtuous middle class citizenry, what Smith called the “sober” people, that would use savings to promote investment in producer (capital) goods that would allow their businesses grow, thereby leading to and promoting economic growth for the benefit of all instead of the manipulation of financial capital for the speculative purposes of the few.

Adam Smith's Wealth of nations: a reader's guide

Prologue 1. Adam Smith's moral philosophical vision: the context of his economic analysis 2. An inquiry: Book I 3. An inquiry: Books II and III 4. An inquiry: Book IV 5. An inquiry: Book V Epilogue: Adam Smith and laissez-faire.

On Adam Smith's Wealth of Nations and the Continental (French), Intellectual Connection: There Was a Small, Intellectual Connection

The common view among economists is that Adam Smith’s technical and economic analysis in the Wealth of Nations (1776) was not original and/or had been borrowed, much without proper credit or citation being made to the original authors. Smith’s contribution was taking the works of others and integrating it into a systematic whole. This claim is demonstrated to be false. Much of Adam Smith’s work in the Wealth of Nations was highly original and creative. Smith’s work on decision theory, interval valued probability, the uncertainty versus risk divide, and his understanding of who the primary contributors were to the problems of deflation and inflation in the macro economy placed him at least 150 years ahead of any of his contemporaries. It was left to John Maynard Keynes and Joseph Schumpeter to equal and surpass Adam Smith’s contributions to economic theory and decision theory.

First, do no harm Capital Failure: Rebuilding Trust in Financial Services Nicholas Morris and David Vines, Eds. Oxford University Press, 2014. 422 pp.

First, do no harm <b>Capital Failure: Rebuilding Trust in Financial Services</b> <i>Nicholas Morris and David Vines, Eds.</i> Oxford University Press, 2014. 422 pp.

Inventing the Classical Constitution

One recurring call over a century of American constitutional thought is for return to a understanding of American federal and state Constitutions. does not necessarily mean originalist or interpretivist. Some classical views, such as the attempt to revitalize Lochner-style economic due process, find little support in the text of the federal Constitution or any of the contemporary state constitutions. Rather, constitutional meaning is thought to lie in a background link between constitution formation and classical statecraft. The core theory rests on the assumption of a to which everyone in some initial position agreed. Like any contract, it would make every participant a winner. The participants have liberty and property rights antecedent to the state, but choose to give up as little of these as needed to empower government. Because insisting on either unanimous consent or individual voter participation on every issue is impractical and unwise, republican representative government comes into existence. But then it is essential that this government act consistently with the and not be captured by factions, or special interests.The result is constitutionalism that is wary of legislation as excessively vulnerable to special interest capture, suspicious of non-unanimous direct democracy tools such as initiatives and referenda because they often disrespect individual rights, and severely critical of most forms of economic regulation. With this distrust of legislation comes a reliance on judges to get the right answer, striking down statutes as unconstitutional even when the court's mandate is not explicitly stated in any constitutional language.This article argues, first, that the Constitution was not classical in its inception. Historically it was pre-classical, particularly on matters of private and property rights and government intervention in the economy. That conclusion is consistent with its text, but even clearer from contemporary perspective, as well as early court interpretation. Second, a distinctively perspective on the Constitution came later, as the influence of Adam Smith's Wealth of Nations and his English and American followers filtered through American academies. The adoption of classical views resulted from the Jacksonian movement, which began in the 1820s. It took root in federal constitutional doctrine with Jackson's appointment of Chief Justice Roger B. Taney, an economic liberal. Classical liberal views increasingly influenced both state and federal constitutional thought well into the twentieth century, although state courts interpreting their own constitutions led the way. These included a reversal of Chief Justice Marshall's broad reading of the federal commerce power, a strong antiregulatory bias favoring private markets, suspicion of monopoly, the rise of a theory of inverse takings so as to limit the government's power to engage in economic development that harmed private property, development of a technical and narrowly focused patent system as an exception to this hostility toward monopoly, legislative capture justifications for judicial review, and a strong view of liberty of contract. As these doctrines expanded, however, constitutional doctrine began to depart more significantly from constitutional texts.While constitutional classicism was liberal in its economics, it was not libertarian. Even the strongest advocates for laissez faire in constitutional economic theory also favored strong regulation of morality on fundamentally Christian grounds. These views characterized both the great Gilded Age public law treatise writers as well as the Supreme Court. Third, one defining element of classical political theory -- the social -- never captured an important following in American mainstream constitutional thought, not even during the founding and early national periods or the later heyday of constitutional classicism. While judges and constitutional writers sometimes spoke of a contract or compact, they almost always meant the text of a constitution or some other authoritative document. They rarely advocated for a doctrine that would enable them to jump off the ratified text to some unnamed fundamental principle. Even the academic and judicial architects of economic substantive due process during the Gilded Age and Progressive Era did not typically rely on the idea, and some of them forcefully rejected it. Fourth, and concluding, the idea that classical constitutional doctrine was displaced by progressive constitutionalism is also wrong, or at least wildly exaggerated. The constitutional revolution that occurred during the first four decades of the twentieth century was certainly supported by self-identified progressives. But support for change was broader and much more centrist, driven by changes in economic theory that today are accepted by liberals and conservatives alike. This makes it impossible to go back.

Faust’s Begehren : Revisiting the History of Political Economy in Faust II

Economic Readings of Faust IISince the publication of Faust II, commentators interested in economic aspects of the text have focused primarily on three of its five acts. Bernd Mahl, whose work on Goethe's economic knowledge remains a standard reference, writes that the topics most frequently addressed following its publication are the creation of paper money in act 1, Faust's renewed activity in act 4, and the commercial ventures of Faust and Mephistopheles in act 5.1 More recent investigations have generally continued this trend.2 Given this lengthy history of interpretation, what is one to make of the second and third acts of Faust //with respect to economic matters? In the Okonomische Lesart (Economic Reading) section of his Faust commentary, Ulrich Gaier offers this assessment: Angesichts der Tatsache, das sich der 2. und 3. Akt in Fausts Kopf abspielen, kann es hier nicht um in der geschichtlichen Folge des Wirtschaftsgebarens der Neuzeit gehen3 (Given the fact that acts 2 and 3 are acted out in Faust's head, real economic activity resulting historically from economic behavior in the modern era cannot be at stake here). While Gaier accurately describes the tendency of literary and economic analyses of Faust II-including his own-to focus on the other three acts, his claim deserves closer scrutiny. It clearly hinges upon what he calls reales Wirtschaften (real economic activity); yet he does not define it or specify how it relates to the history of modern political economy. Admittedly, the second and third acts do not appear at first glance to contain the traditional economic elements found in the other acts. However, as I shall argue, to discount the two acts encompassing the Helena episode simply because they unfold in Faust's head severely underestimates the complexity of Goethe's political-economic thought in this significant portion of Faust //.Goethe does not simply set aside the keen insight into economic matters that he skillfully demonstrates throughout the rest of his self-described Hauptgeschaft (main business).4 Rather, he accentuates in acts 2 and 3 the subjective nature of value, particularly as it relates to the economic principle of demand. Goethe repeatedly employs and couples Wert (value) and Begebr/en (demand) in scenes leading up to and including the Helena episode. Moreover, he demonstrates in these two acts a significant change in his own approach to value, from an intrinsic to a subjective view of it.The model of subjective value Goethe presents in Faust II draws on his wide-ranging experience in Weimar as a privy councillor specializing in tax and finance matters, on the one hand, and his extensive knowledge of contemporaneous political-economic texts, on the other. In official writings from 1785 and 1793, Goethe relies on the concept of intrinsic value when addressing taxes and money, respectively. After the turn of the century, his introduction to the work of Adam Smith through Georg Sartorius demarcates a shift in his approach to value toward the subjective view that he presents in Faust II. Another, lesser-known Scottish economist likely contributed to Goethe's understanding of demand. Goethe was introduced to the work of Sir James Steuart as early as 1777. Steuart was well known in Germany at the time, and his Principles of Political Oeconomy (1767) was in fact more prominent there during the 1780s and 1790s than Smith's Wealth of Nations (1776). In Faust II, Goethe applies his practical experience and theoretical knowledge to the classical example of Helena. His point, I maintain, is that Helena does not possess any intrinsic value. Quite the opposite: she characterizes Faust's subjective valuation of her or, to put it in Faustian terms, his striving. At the same time, Helena fleetingly embodies not only Faust's but also his economic demand, as Begehr had become synonymous with Nachfrage (demand) by the middle of the 1820s. The duality of the key term BegehrenFaust describes Helena as mein einziges Begehren (7412; my sole demand/ desire [translation modified])5-allows for an economic analysis of acts 2 and 3. …

Does Mill's case for infant industry protection capture Hamilton's and List's arguments for promoting industrial development?

Mill's case for infant-industry protection is widely regarded as capturing the arguments by Hamilton and List. This paper argues that they are actually analytically different. While all three were influenced by Smith's Wealth of Nations, Mill took from it something different than the other two. His endorsement passage for protection refers to a standalone industry. Hamilton and List attached significance to the pin-making type of division of labor at the economy-level but they emphasized the development of that division as the activation of backward and forward production linkages, à la Hirschman, with increasing diversification and differentiation of occupations and industries. Mill only considered employing customs duties in his passage, although in some personal correspondence in the 1860s he mentioned a subsidy. Contrary to mainstream misrepresentations, Hamilton and List did not restrict themselves to proposing customs duties, but suggested both trade and non-trade interventions to activate linkages. Mill's formulation focuses attention on very simple learning by doing to establish the standalone industry. Thanks to their conception of the development process, Hamilton and List appreciated the complexity of technology acquisitions and devoted far more attention to that subject. The implications of these differences for future research and policy considerations are briefly discussed.

Les 'Lettres sur la sympathie' (1798) de Sophie de Grouchy: philosophie morale et reforme sociale

Adam Smith's Theory of Moral Sentiments was given three French translations in the eighteenth century. The third, published in 1798 and based on the substantially revised sixth edition that Smith completed in 1789, was the work of Sophie de Grouchy, the widow of the mathematician and republican political theorist Jean-Antoine-Nicolas de Caritat, Marquis de Condorcet. The translation was accompanied by eight letters on the subject of sympathy by de Grouchy herself that were addressed to a certain C***, who might have been Condorcet, although he had been executed in 1793, but who might also have been the medical philosopher Pierre-Jean-Georges Cabanis, both because he was a close acquaintance (he was married to Sophie de Grouchy's sister) and because he was to take up several of the concerns of the Lettres sur la sympathie in his own Rapports du physique au moral de l'homme of 1802. Both works addressed the problem of explaining how some sentiments could also be moral sentiments, as, intriguingly, the title of Smith's book appeared to announce. Both works also went on to present parallel critical assessments of what they took to be Smith's solution to the problem. The content and direction of these assessments form the basis of this new, skilfully annotated edition of the Lettres produced by Marc André Bernier and Deidre Dawson. It has been complemented by six illuminating essays, by Elisabeth Badinter, Catriona Seth, Daniel Dumouchel, Michel Malherbe, and the two editors themselves, dealing both with Grouchy's Lettres and the broader subject of the French reception of Smith's moral theory. As Badinter and Seth note in their contributions, it is likely that Grouchy's translation and commentary were intended originally to complement the never published (and possibly never written) commentary by her husband on the translation of Smith's Wealth of Nations published in 1790 by the poet Jean-Antoine Roucher. Grouchy's assessment of Smith's moral theory was therefore designed to parallel Condorcet's assessment of Smith's political economy. As the well-researched essays by the other contributors help to show, one of the implications of this parallel is that Grouchy's text amounts to a helpful guide not only to the similarities and differences between her own and Smith's moral theories, but also between Smith's and Condorcet's versions of political economy. Most of the emphasis in recent scholarship has tended to highlight the similarities. With this timely edition, it will be easier to identify some of the differences, particularly in the light of Smith's treatment of the idea of an impartial spectator and of the imaginative capabilities that this idea presupposed. This, in turn, will help with the still unfinished task of finding out more about the content and shape of European moral and political thought after Rousseau.

The Community of Commerce:

ABSTRACT This article analyzes the rhetoric of the famous opening sections of Adam Smith's Wealth of Nations, drawing on his understanding of sympathy as developed in The Theory of Moral Sentiments and the theory of rhetoric developed in the Lectures on Rhetoric and Belles Lettres. It shows how Smith uses rhetorical means for sketching a vision of an egalitarian society, united by sympathetic ties, that includes not only author and reader but also the characters that appear in the first scenes of the Wealth of Nations. Yet Smith's vision is deceptively one-sided and “rhetorical” in a problematic sense, departing from the impartiality Smith usually recommends. This one-sidedness points to a systematic problem of commercial society in Smith's time as well as today: the unequal ability of its members to use rhetoric and thereby to attract sympathy from others.

Americanism and financial accounting theory – Part 1: Was America born capitalist?

This paper (Part 1), and two related papers (Part 2: The ‘modern business enterprise’, America's transition to capitalism, and the genesis of management accounting; and Part 3: Adam Smith, the rise and fall of socialism, and Irving Fisher's theory of accounting), explore historical links between American ideology and Irving Fisher's theory of accounting. They explain Fisher's theory as the product of America's exceptional transition to capitalism and the ideological consequences. Part 1 uses Marx's theories of the transition in England, of colonisation, and of ideology, to construct an accounting history model of America's transition to capitalism that identifies the dominant social relations of production and calculative mentalities, and uses them to predict the accounting signatures and political ideologies we should observe if the theories are correct. Parts 1 and 2 test the model. Part 3 explores the ideological consequences of America's transition, for America and financial accounting. Scholars generally assume that America was ‘born capitalist’; historians argue it became capitalist sometime from the late 18th to early 19th centuries. The model, however, identifies early farmers as ‘simple commodity producers’ who, it predicts, kept only single entry accounts of debt, and had a ‘producer’ ideology of ‘equality’ and ‘freedom’. It identifies planters and manufacturers as ‘semi-capitalists’ – part merchant capitalist and part simple commodity producer – who it predicts calculated ‘profit’ as consumable surplus, pursued the ‘simple rate of profit’, controlled only prime costs, and had an ideology of ‘individualism’ that combined the producers’ ideology with the merchants’ ‘laissez-faire’. Part 1 re-examines evidence from accounts to around the mid-19th century, which confirms that farmers were not capitalists and that even the most advanced merchants, manufacturers and planters were semi-capitalists. Part 2 searches for capitalists in the second half of the 19th century. It re-examines evidence from the accounts of the Boston Associates who historians have seen as ‘proto-industrial capitalists’; from the railroads heralded by Chandler as the beginning of ‘managerial capitalism’; and from ‘entrepreneurial capitalists’ like Andrew Carnegie who created the large corporations that conquered America from the 1880s. Their financial accounts and cost management systems reveal the same semi-capitalist mentality found in the early 19th century. Re-examination of the ‘costing renaissance’ in the 1890s and evidence from the DuPont Powder Company and General Motors from 1900 to 1920, suggests that only from around 1900, after escalating conflict between ‘capital and labour’, did the capitalist mentality appear in new management accounting systems focused on ‘return on investment’. Part 3 shows that the accounting evidence closely correlates with the history of American political ideology. It argues that Adam Smith's Wealth of Nations dominated American politics until the late 19th century because it theorised a nation of simple commodity producers and semi-capitalists. It explains the delay in America's transition compared to Britain's, and the decline in the popularity of laissez-faire from the 1880s, as consequences of this exceptional starting point. ‘Big business’ capitalism created an ideological problem for America's ruling elite, particularly the threat of socialism from around 1900 to 1920. Part 3 argues that Fisher's neoclassical theory of ‘capital’ and ‘income’, designed as a critique of Marx, responded to this problem and played an important role in undermining middle class support for socialism. Fisher said he based his theory on accounting practice, particularly double entry bookkeeping, but Part 3 shows he did not use or understand it, which divorced his accounting from reality. American history's legacy to the world, the papers therefore conclude, is a pathological theory of financial accounting.