2023 marks the tercentenary of the birth of Adam Smith. A towering figure of the Scottish Enlightenment, his writings helped to establish the discipline we now refer to as Political Economy. Indeed, many of his ideas remain the foundation of economic theories still in use today. It is this ongoing relevance, and the lessons we can take from Smith’s methods, that binds the papers in this Special Issue together. The Special Issue draws upon excellent contributions from renowned scholars covering a wide array of Smith’s contributions to economics and political economy.

Adam Smith saw the division of labour and specialisation as the driver of ‘universal opulence’, a process limited by the scope of the market. He also believed that competition was essential to ensure growth benefited the public. Yet eventually there could be a trade-off between these two mechanisms. In today’s era of global production networks, the markets at certain links in supply chains may support just one specialised supplier; and in winner-take-all digital markets there is a single supplier even at global scale. When the scope of the market is global, there may be a trade-off between specialisation and competition.

For path-breaking insights on how prices can guide the efficient allocation of resources and how innovation and investment can spur economic growth, Adam Smith is justly renowned. He was, however, well aware of problems posed by market dominance—specifically in banking and, more generally, wherever getting to the scale that delivers increasing returns leads to monopolistic behaviour. For the historical record, we draw on the recent wide-ranging survey by Acemoglu and Johnson on how the benefits of innovation have been spread across society since the Industrial Revolution. We also consider these issues in the context of geo-political competition.

This article reviews Adam Smith’s clearly articulated views about the desirability of free trade and his equally strong view on the necessity of sound institutions and ‘the tolerable administration of justice’ as key ingredients of successful economic management. It starts with Smith’s views on free trade and shows how pertinent they are to today’s high-level trade policy challenges. It then considers a more detailed day-to-day instrument of policy—the Trade Remedies Authority (TRA). Following Brexit, the TRA was created as an arms-length body for investigating cases for granting temporary import restrictions to specific products according to a reasonably well-defined objective process. The article demonstrates how, over the first 2 years of its life, the TRA has been reduced from a useful administrative instrument to a fig leaf for a political process for granting protection to petitioners. Unfortunately, this tendency to displace analytical approaches to policy by purely political ones can now be observed in many activities of UK governance.

Adam Smith had a longstanding interest in colonialism and more generally relations between Europe and the rest of the world. It was through engagement with these issues that he worked through some of the central elements of his thought. This paper examines both Smith’s contexts and our own and argues that Smith’s work provides an important resource for reflecting today on relations with distant and diverse others today. It identifies three aspects of Smith’s thought that are particularly relevant: the political and economic costs of colonial ventures to the colonisers themselves, the question of whether and how imperialism had encouraged ‘progress’, and the question of how social and cultural differences should be understood and judged. The paper teases out Smith’s sometimes uncertain arguments in these areas and suggests that they can contribute to our own reflections on the troubled practices of liberal imperialism.

Duncan Black, like Adam Smith before him, was trained at, and taught at, the University of Glasgow. Like Smith, Black followed the Enlightenment in appreciating the importance of theory and of its empirical applications. Black sought to apply the ideas of a schedule of preferences and a conception of equilibrium, to politics, as Smith had done in economics. Black believed that his median voter theorem could generalize to a theory of politics, much as Smith’s contributions did for market economics. Black did not complete that generalization, but William Riker did offer a theory of institutional politics, designed to complete Black’s project.

A key insight from Adam Smith is that economists should base their conclusions about a monetary institution or policy on a careful study of the history of that institution or policy, a study that includes the experiences of other countries. To illustrate Smith’s reliance on financial history we cover five current monetary problems that have close analogies with problems that Smith discussed: (1) inflation, (2) banking panics, (3) public debt, (4) usury laws, (5) central bank digital currencies.

Adam Smith promoted free banking—private, competitive, convertible banknotes. He also supported restrictions on banks. We study Smith’s views and the era in which they developed, suggesting his ‘regulations’ were a backstop against banks’ risks to depositors but primarily monetary stability. In modern parlance, Smith supported macroprudential regulations to underpin monetary stability, as did Friedman and Schwartz the US FDIC. We discuss why Smith’s vision for banking went unrealised. Bank regulation became microprudential and ran aground in 2008/2009. The prominence of macroprudential regulation now provides a chance to reorientate regulation to support monetary stability. Early signs are not promising.

The key aim of this article is to reassess the societal consequences of the adoption of neo-liberal policies, post-1970, in the light of the writings of Adam Smith. We make two main points: First, the neo-liberal paradigm (NLP) and its characteristics are not the creation of Adam Smith as asserted by leading economists and, indeed, the contrary is very much the case. Second, given this, what does Adam Smith’s work tell us about how we can fix modern-day capitalism broken by the NLP and bring it back in line with Smith’s work?

The contemporary relevance of Adam Smith is evidenced by continued reference to his name. Computational analysis identifies over 700 mentions of Smith and his two famous works—The Theory of Moral Sentiments and The Wealth of Nations—in post-World War 1 House of Commons debates. We find some parliamentarians appreciate Smith’s complex ideas, but most references are ‘ornamental’. Charting Smith’s use over the decades, this paper builds on Kirk Willis’ idea that studying parliamentary debates are an ideal way to understand how, at best, policy ideas, germinate and disseminate over time, or, at worst, how ‘complex ideas became slogans’.

This study is a reconsideration of a theme, connecting The Theory of Moral Sentiments and The Wealth of Nations, namely the interplay between moral sentiments and self-interest. Two aspects of the theme are examined. The first consists of an interpretation of the so-called ‘das Adam Smith Problem’, an issue originally pointed out by nineteenth-century German scholars. The second, building on the insight of Smith on the association of shame and poverty, reports on recent research that seeks to examine how emotions impact the perception of economic interests and behaviour in marginalized groups.