Our modern observation-based approaches to the study of the human condition were shaped by the Scottish Enlightenment. Political Economy emerged as a discipline of its own in the nineteenth century, then fragmented further around the dawn of the twentieth century. Today, we see Political Economy’s pieces being reassembled and reunited with their philosophical roots. This issue pauses to reflect on the history of this new but also old field of study.

The essay investigates the proposition that economic questions are a fit subject for science. This investigation will involve a selective examination of seventeenth-century writings before looking at again selective Enlightenment texts. The essay is deliberately wide ranging, but it aims to pick out the emergence or crystallization of political economy by noting how theorists sought to establish it as a subject matter and in the process develop ways of studying it that aimed to uncover regularities and exhibit generality, systematicity, and precision. Together these supported its pretensions or claims to be a science that would in a Baconian manner be useful and free of the perceived shackles of a moralistic classical disparagement of economic activity.

For all the recent discoveries of behavioral psychology and experimental economics, the spirit of homo economicus still dominates the contemporary disciplines of economics, political science, and sociology. Turning back to the earliest chapters of political economy, however, reveals that pioneering figures such as Francis Bacon, Thomas Hobbes, and Adam Smith were hardly apostles of economic rationality as they are often portrayed in influential narratives of the development of the social sciences. As we will see, while all three of these thinkers can plausibly be read as endorsing “rationality,” they were also well aware of the systematic irrationality of human conduct, including a remarkable number of the cognitive biases later “discovered” by contemporary behavioral economists. Building on these insights I offer modest suggestions for how these thinkers, properly understood, might carry the behavioral revolution in different directions than those heretofore suggested.

In the Introduction to his Treatise of Human Nature, David Hume credits “my Lord Shaftesbury” as one of the “philosophers in England, who have begun to put the science of man on a new footing.” I describe aspects of Shaftesbury’s philosophy that justify the credit Hume gives him. I focus on Shaftesbury’s refutation of psychological egoism, his examination of partiality, and his views on how to promote impartial virtue. I also discuss Shaftesbury’s political commitments, and raise questions about recent interpretations that have taken his Characteristicks to be a polemic, partisan text.

“Das Adam Smith Problem” is the name given by eighteenth-century German scholars to the question of how to reconcile the role of self-interest in the Wealth of Nations with Smith’s advocacy of sympathy in Theory of Moral Sentiments. As the discipline of economics developed, it focused on the interaction of selfish agents, pursuing their private interests. However, behavioral economists have rediscovered the existence and importance of multiple motivations, and a new Das Adam Smith Problem has arisen, of how to accommodate self-regarding and pro-social motivations in a single system. This question is particularly important because of evidence of motivation crowding, where paying people can backfire, with payments achieving the opposite effects of those intended. Psychologists have proposed a mechanism for the crowding out of “intrinsic motivations” for doing a task, when payment is used to incentivize effort. However, they argue that pro-social motivations are different from these intrinsic motivations, implying that crowding out of pro-social motivations requires a different mechanism. In this essay I present an answer to the new Das Adam Smith problem, proposing a mechanism that can underpin the crowding out of both pro-social and intrinsic motivations, whereby motivations are prompted by frames and motivation crowding is underpinned by the crowding out of frames. I explore some of the implications of this mechanism for research and policy.

In a providential account of the changing relation between political economy and economics, the late nineteenth-century development of economics is identified with the rational choice model; and the revival of political economy in the late twentieth century comes with the export of this model to politics and the other social sciences. An alternative prudential account locates the revival of political economy with a significant qualification to the rational choice model. This qualification restores an eighteenth- and nineteenth-century view of rule-following to human agency. This essay sets out these accounts and draws the conclusion that the choice of one over the other matters, not least for the practice of contemporary politics.

Propriety and self-command are distinctive and complex Smithian concepts. This essay attempts to shed more light on the meaning and significance of propriety and the virtue of self-command. After a brief introduction on the recent reappraisal of The Theory of Moral Sentiments (TMS), a short analysis of Smith’s crucial idea of sympathy follows. Then the relevance of propriety is discussed and some connections between propriety and the virtue of self-command are explored. Finally, the importance of Smith’s self-command is reassessed, paying attention to its origins and philosophical implications. It is noteworthy that, through self-command and propriety, TMS stresses the role of intentions and motivations. By doing so, Adam Smith opens up new threads to rethink personal liberty and its ethical importance for political economy.

My point of departure in this essay is Smith’s definition of government. “Civil government,” he writes, “so far as it is instituted for the security of property, is in reality instituted for the defence of the rich against the poor, or of those who have some property against those who have none at all.” First I unpack Smith’s definition of government as the protection of the rich against the poor. I argue that, on Smith’s view, this is always part of what government is for. I then turn to the question of what, according to Smith, our governors can do to protect the wealth of the rich from the resentment of the poor. I consider, and reject, the idea that Smith might conceive of education as a means of alleviating the resentment of the poor at their poverty. I then describe how, in his lectures on jurisprudence, Smith refines and develops Hume’s taxonomy of the opinions upon which all government rests. The sense of allegiance to government, according to Smith, is shaped by instinctive deference to natural forms of authority as well as by rational, Whiggish considerations of utility. I argue that it is the principle of authority that provides the feelings of loyalty upon which government chiefly rests. It follows, I suggest, that to the extent that Smith looked to government to protect the property of the rich against the poor, and thereby to maintain the peace and stability of society at large, he cannot have sought to lessen the hold on ordinary people of natural sentiments of deference. In addition, I consider the implications of Smith’s theory of government for the question of his general attitude toward poverty. I argue against the view that Smith has recognizably “liberal,” progressive views of how the poor should be treated. Instead, I locate Smith in the political culture of the Whiggism of his day.

The method of analysis Adam Smith uses is relatively similar to the method economics generally uses today, especially the subfield of experimental economics. The method of analysis that Smith uses is coherent and consistent throughout his whole work. He searches for constant variables and then sees what variables are changed by exogenous changes. In particular, Smith looks for the constancy in human nature, and analyzes how historical and material circumstances change the incentives that the constant human nature faces. This method, applied to human conduct in all its aspects, makes it easy for many economists today to see some continuity between Smith’s political economy and today’s economic science.

When did liberal political theory, or perhaps liberal political economy, begin? Although many would trace their beginnings to the writings of Adam Smith, David Hume, or perhaps John Locke, in fact many of the propositions we today recognize as forming the core of liberalism were articulated in the first half of the seventeenth century by an unduly neglected group called the Levellers and their leader John Lilburne. In this essay, I first give some historical background and context to the Levellers and Lilburne. Next, I articulate several of their liberal positions, including freedom of religion, freedom of speech, and freedom of commerce and trade, and I examine their justifications for these positions, which I argue were both novel and radical. I conclude by exploring the contemporary relevance of the Levellers and argue that they should be considered as among liberalism’s most important founders.

David Hume wrote prolifically and influentially on economics and was an enthusiast for the modern commercial era of manufacturing and global trade. As a vocal critic of the Church, and possibly a nonbeliever, Hume positioned commerce at the vanguard of secularism. I here argue that Hume broached ideas that gesture toward those offered by Max Weber in his famous Protestant Ethic and the Spirit of Capitalism (1904-5). Hume discerned a strong correlation between economic flourishing and Protestantism, and he pointed to a “spirit of the age” that was built on modern commerce and fueled by religious tolerance. The Roman Catholic Church, by contrast, came under considerable attack by Hume, for fostering intolerance and draining and diverting funds. Hume recognized several of the dispositions that later appealed to Weber: an increased work ethic and tendency to frugality, enterprise, and investment in Protestant regions. A neo-Weberian literature now points to additional factors, the spread of literacy and the fostering of a network of trust among strangers, both of which Hume noted. Insofar as modern commerce both feeds upon and fosters more liberties and representative government, Hume also linked these with the advent and spread of Protestantism. My aim is not to suggest that these arguments have merit—there is good reason to question each and every assertion under the historical microscope—but rather to highlight the broader religious and cultural context in which Hume’s economics was broached.

This essay examines Hume’s treatment of money in light of his view of the imagination. It begins with his claim that money is distinct from wealth, the latter arising, according to vulgar reasoning, from the power of acquisition that it represents, or, understood philosophically, from the labor that produces it. The salient features that Hume identifies with the imagination are then put forth, namely its power to combine ideas creatively and the principle of easy transition that characterizes its movement among them. Two issues that these features explain are then discussed: first, why people take value to lie in the material of which money is made, and, second, why they assign value to what they take money to represent, namely, wealth. In both cases, the imagination creates a new relation, an illusion or fiction, that cannot be traced directly to experience. In the case of money, the faculty conjoins what is intangible (the power of acquisition) with the physical qualities of specie; in the case of property it produces a causal relation that connects persons with objects to constitute stable possession that constitutes ownership. Hume also appeals to the imagination to explain the rules of property that subsequently develop (present possession, occupation, prescription, and transference). The essay concludes by emphasizing that being based on the imagination is not in itself indicative of any instability in either money or property and the practices they enshrine, a feature they share with other phenomena (such as the self and continued existence) that Hume also traces to the same faculty.

Although the architectonic of Plato’s best city is dazzling, some critics find its detailed prescriptions inimical to human freedom and well-being. Most notably, Karl Popper in The Open Society and its Enemies sees it as a proto-totalitarian recipe, choking all initiative and variety out of the citizenry. This essay does not directly respond to Popper’s critique but instead spotlights a strand in the dialogue that positions Plato as an advocate of regulatory relaxation and economic liberty to an extent otherwise unknown in the ancient world and by no means unopposed in ours. His contribution to liberal political economy thereby merits greater attention and respect.