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Vernon Smith on Adam Smith (and on Adam Smith’s Interpreters)

Pasted below is a comment left on my Facebook page (and also at the Wall Street Journal) by my emeritus Nobel-laureate colleague, Vernon Smith:

Here is my comment in the Conversation section of WSJ on the Swain article on Adam Smith: The problem with much of the literature on Adam Smith is that the authors do not read him as carefully as he wrote. For example, reference is made to “people pursuing their own self-interest,” but Smith used the term “own interest” 25 times in Vol. II of WN, the term “self interest” only once in referring to the minor clergy of Rome, who were “kept more alive by the powerful motive of self-interest. The parochial clergy derive, many of them, a very considerable part of their subsistence from the voluntary oblations of the people; a source of revenue which confession gives them many opportunities of improving. The mendicant orders derive their whole subsistence from such oblations. It is with them, as with the hussars and light infantry of some armies; no plunder, no pay.) WN, Vol II, p234-5).

Smith also made plain that commodity value was determined by labor only “In that early and rude state of society which precedes both the accumulation of stock (capital) and the appropriation of land, the proportion between the quantities of labour necessary for acquiring different objects seems to be the only circumstance which can afford any rule for exchanging them for one another.” (WN, Vol. I. p 49)

DBx: Indeed it is true both that Adam Smith wrote with remarkable care, and that many of his readers read with remarkable carelessness.

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