This chapter introduces the idea of a competition–democracy nexus as the object of inquiry of the book and traces its intellectual trajectory across six centuries of legal, economic, and political thought. It shows how early manifestations of the idea of a competition–democracy nexus (competition–democracy nexus 1.0) took shape in the late 16th and early 17th century with the critique of monopoly by Thomas More, the early common lawyers and the English Leveller movement. It also recounts how early liberal thinkers, most notably Adam Smith, James Steuart and Montesquieu, celebrated the advent of competitive markets as a driving-force behind the transformation of the feudal order into a republican society. The chapter also analyses how the idea of a competition–democracy nexus (competition–democracy nexus 2.0) lay at the origin of US antitrust law and had an important bearing on various antitrust paradigms until the 1970s. The chapter further describes the emergence of the idea of a competition–democracy nexus as the central tenet of the German Ordoliberal School before and during the Second World War and its influence on the early days of EU competition law (competition–democracy nexus 3.0).

Chapter 2 focuses on the emergence of the modern concept of the reasonable person in nineteenth-century Britain. It argues that this development resulted from the legal and economic needs of the industrial revolution and was informed by the metaphysics of the Scottish sentimental Enlightenment. The chapter’s point of departure is the case known as Blyth v The Company of Proprietors of the Birmingham Waterworks, one of the first cases to discuss explicitly modern law’s reasonable person. Distinguishing between a rational Enlightenment and a sentimental Enlightenment, the chapter then shows that the underlying rationale of the reasonable person relies heavily on the sentimental Enlightenment, namely on David Hume’s and Adam Smith’s thought on the importance of empathy, judgement making in relation to the feelings of others, the incomplete understanding of morality that can be gained from objective reason, and the importance of a human common sense. The third section explains how the industrial revolution and the sentimental Enlightenment influenced the life of Baron Alderson, the judge who oversaw Mr Blyth’s case against the Birmingham Waterworks.

This chapter explores some central features of morality in terms of what are commonly regarded as virtues. A virtue is a disposition that is an important feature of one’s character. As such, a virtue endures over an extended period of time, not just for a brief moment. Still, a virtue such as honesty implies its regular exercise. However, one can occasionally behave dishonestly without this undermining its standing as one’s virtue. The notion that some emphasis on basic moral virtues should be included in K-12 and college education has long received strong public support. However, there has also been widespread disagreement about just how this should be done and with what ends in mind. Presumably, some general uncertainty, if not disagreement, about the nature and foundation of morality accounts for much of this. This uncertainty is discussed in terms of reasonableness.

This chapter addresses Wollstonecraft’s engagement with narratives of property and property society in Smith and Rousseau, as reflected in her A Short Residence in Sweden, Norway and Denmark (1796). In political economy’s imaginary, the figure of property encapsulates the ambivalences at the heart of late eighteenth-century modernity and poses questions of affective response and social relation which were fundamental to political economy’s account of social origin. Wollstonecraft’s attention to property of many kinds on her travels is read as an on-going critique of the contemporary political economic order, as well as attempts to imagine alternatives to it, such as the independent, comfortable existence suggested by the farmstead or cottage. Literary form emerges as a means through which questions of human personality and identity in commercial modernity might be framed, and as a means of insisting on ‘something’ more than the mediated social relations of market society’s ‘society of strangers’.

This chapter opens with an account of the Bank Restriction Act (1797) as marking a crisis in the British credit system on which the economy depended. It reads Wollstonecraft’s unfinished novel, The Wrongs of Woman (1798), as investigating the gendered systems of affect, belief, and credit which underwrote both political economy and social relations. Against Adam Smith’s attempt to regulate potentially disruptive forms of affect, including credulity and sensibility, the ‘extreme credulity’ of Wollstonecraft’s protagonist, Maria, rewrites the usual story of irrational femininity as the binary other to masculine rationality. Demonstrating the mutual imbrication of financial and sexual economies in late eighteenth-century commercial society, Wollstonecraft attempts to mobilise an alternative economy of social feeling to reform a selfish, sexualised world of commerce based on self-interest, and to reformulate the relations between morality and commercial society – between affect and money – by asking what else might circulate to social advantage.

When Wollstonecraft’s Vindication of the Rights of Woman (1792) was first published, it was categorised in Joseph Johnson’s Analytical Review as a work of political economy. The introduction asks what this term meant for Wollstonecraft and her contemporaries, and argues that it was used to understand the nature and operation of modern commercial society, as well as the potential for its reformation. Wollstonecraft’s relation to this project is explored, both through a survey of her engagement with Adam Smith and through her lived experience as an unmarried, often indebted woman in a society organised around possession of property. Wollstonecraft is presented as a writer engaging throughout her career as a critic of the connected material, economic, moral, psychological, and social conditions of modern commercial contemporaneity, and as anticipating the opposition to political economy of later Romantic writers.

This chapter covers: historical theorizing about what role the state ought to play in an economy; from the mercantilist to the market role; historical fear of a Leviathan government role; government role in France and the origin of the term “laissez faire”; Adam Smith’s alternative view of the “wealth of nations”; the role of the “invisible hand”; Weber’s view of mercantilism and of its role in the growth of the capitalist system; advent of the Industrial Revolution and its need for energy, and also for better use of time; Adam Smith’s view of the role of the state in regulations and also in some redistribution; and the importance of empathy in communities.

In Chapter 2, I discuss the moral foundation for capitalism provided by Adam Smith. The great philosopher of the Scottish Enlightenment is frequently invoked by economists as the father of their discipline, yet Smith’s life and writings have been widely distorted. In contrast to his popular caricature today, Smith was a moral philosopher of the highest caliber who incorporated important moral perspectives throughout his writings. Smith presented his moral theory based on social norms and culture in The Theory of Moral Sentiments and maintained it as the moral foundation for his economic theory in The Wealth of Nations. Smith’s moral theory is based on the principle of sympathy and the behavioral norms that arise due to past social experiences that reveal standards of right and wrong behavior. Similar to the other philosophers of the Scottish Enlightenment, he attributes moral judgment and the moral conscience to the impartial spectator, but he also reserves important roles for religion and moral codes such as the Stoic virtues. When nineteenth-century classical economists adopted narrow self-interest as the first principle of their discipline, therefore, they adopted a principle that Smith and the other Scottish Enlightenment philosophers had adamantly rejected.

This chapter examines the attempts of Enlightenment philosophers David Hume and Adam Smith to reconcile war with their theories of progress. Both made impartiality a touchstone of enlightened judgement, and so found that the national partiality aroused by war was deeply problematic. Humes optimistic view of progress was undermined by his pessimistic account of the passions released in war, and by the evidence of the destructive waste entailed in contemporary war-making. His desire to moderate contemporary bellicosity led him, in his History of England, to emphasise medieval magnanimity in victory, in a way that was at odds with his progressive agenda. Adam Smith encountered a comparable problem. His attempts in his Theory of Moral Sentiments to provide improving models of public responses to war were at odds with his later conviction that the public was dangerously insulated from the destructive realities of war.

The political theorist and intellectual historian Istvan Hont argued that the term ‘commercial society’ was used by Adam Smith in ways that were distinct from any of his peers. Smith, Hont claims, ‘stretched’ the term in order to ‘make it a theoretical object for moral and political inquiry’. This chapter engages with this argument using computational methods for interrogating datasets of varying sizes.

The first, a custom-produced ‘Adam Smith’ corpus, is compared with a ‘Scottish Enlightenment’ corpus, both of which have been extracted from the larger Eighteenth Century Collections Online dataset. For the second of these datasets, a list of publishers’ names has been collated, from existing scholarly enquiries by Richard B. Sher and Andrew Hook, to construct a dataset that enables one to inspect and interrogate what might be thought of as the distinctively Scottish history of ideas in the period within which Smith wrote his seminal works.

The comparative method allows us to test Hont’s assertion that Smith deployed the concept of ‘commercial society’ idiosyncratically by charting the extent to which the features of Smith’s thinking were adopted by his contemporaries, firstly within the Scottish context, and secondly within anglophone culture of the period as represented by Eighteenth Century Collections Online.

The relationship between capitalism and nationalism escapes easy generalization – hardly surprising given the many conceptions of nationalism, and the many stages and varieties of capitalism. Let us begin, then, with some ideal-typical definitions.

Nationalism is a form of politicized ethnicity in which a self-identified cultural group seeks to create or succeeds in creating a nation-state of its own. It also refers to ideological goals and tangible policies oriented to the preservation or strengthening of the nation-state.

There are as many ways of defining capitalism as there are of nationalism. For our purposes, this definition is most useful. Capitalism is a political-economic system in which property rights are legally protected by the state, in which prices are set primarily by supply and demand in a market composed of profit-seeking entrepreneurs or companies, usually (but not always) employing free wage labor.

Social philosophers and theologians prioritize the demands of justice whenever they conflict with agape’s claims. They do so based on the following implicit rules, namely: (1) Perfect duties take precedence over imperfect duties. (2) Subsistence test—whatever is critical for society’s existence has primacy. (3) Legal debt takes priority over moral debt. Both economic history and praxis validate the need to prioritize the claims of justice. After all, it provides critical legal institutional preconditions for the creation and protection of markets. It provides the economic guardrails to prevent anti-social preferences and transactions. It is essential to getting around collective-action problems.

The last Fifty years have witnessed the rediscovery of Adam Smith’s moral philosophy and an increasing exploration of his conception of himself as a moral philosopher. Recent scholarship has dwelt on the eclectic nature of this thinking. Scholars have suggested that Smith draws on and combines elements drawn from across the ancient and modern schools of philosophy, and that the moral philosophy of the Scottish Enlightenment is characterised by an awareness of and response to the fact of moral pluralism. This leaves open the possibility that different modes of moral thinking can issue in incommensurable conclusions: that in some cases there might be no way to decide what is the ‘right’ thing to do. I explore the implications of these readings for Smith’s understanding of the role of philosophy in moral decision-making and, more particularly, what this means for teaching moral philosophy. Smith saw philosophy as a specific and limited activity that formed but a small part of the moral life of the individual. Moreover, Smith cautioned against over-ambition in philosophical thinking and warned of the intellectual, social, and political dangers of too much philosophy.

In the final edition of the Theory of Moral Sentiments (TMS), Smith recommends several literary authors – Racine and Voltaire, Richardson, Marivaux, and Riccoboni – as “much better instructors than Zeno, Chrysippus, or Epictetus,” specifically in their illustrations of relationships of love and friendship as well as the “private and domestic affections,” like “parental tenderness” and “filial piety” (III.3.13-4). Smith does not here explain how literature performs this instructive function, and his remarks on the function of literature are scattered across TMS and the Lectures on Rhetoric and Belles Lettres. This chapter contributes to a growing body of scholarship on Smith and literature by focusing closely on this recommendation, elucidating the instructive potential of the early novel, and showing how well suited the techniques of that form are to the goals and challenges of Smith’s sentimentalist moral philosophy. By examining shared themes and formal features of the novels of Samuel Richardson, Pierre Marivaux, and Marie-Jeanne Riccoboni, I show how a reader’s engagement with these novels helps to enable and train their skills as an impartial and sympathetic spectator.

Adam Smith argued that, as the monopoly provider of religious services, the medieval Church represented a formidable impediment to economic development. How did the Church maintain its monopoly; and how did that monopoly break down in the Reformation? Further, given that the secular lords had a substantial comparative advantage in violence relative to the Church, how did the Church maintain its power? In addressing these questions, Smith developed a rich and systematic approach to the incentives, institutions, and competition surrounding the medieval Church.

For Adam Smith, resentment is the natural passion we feel at experiencing or witnessing injustice and the basis for our natural sense of justice. Why does Smith restrict justifiable resentment to injustice given his seeming admission that we do naturally feel resentment beyond the case of injury? Smith never directly addresses why such resentments are inappropriate in The Theory of Moral Sentiments; we reconstruct a response drawn from his moral psychology. First, we explain the origins of Smith’s narrow view of justice. We then turn to Smith’s account of resentment, explaining its purpose as the natural motive for narrow justice, questioning the split between descriptive and normative resentment. We ultimately argue that resentment’s logical tie to punishment for Smith is necessary but insufficient, and that injury and resentment are separate conditions required to justify punishment. Finally, we reconstruct Smith’s normative justifications for severing the tie between improper resentments and punishment, driven by his claims about equal status and about sociability.

This chapter situates Smith scholarship in a long historical view. It highlights the kaleidoscopic nature of reading and writing about Smith from the eighteenth century to the present. A brief survey of the early reception of Smith’s works in the anglophone world demonstrates how and why Smith was initially read as a practical resource before being transformed into an intellectual and political authority. Interpretive problems like “Das Adam Smith Problem” and the Chicago School Smith, introduced in the nineteenth and twentieth centuries, then became starting points for critical and revisionist historiography. Contemporary scholarship has been marked by several distinctive features: an increasing interest in Smith as a philosophical thinker, the centrality of The Theory of Moral Sentiments, engagements with Smith to proliferate new defenses and critiques of liberalism, and the reformulation of older categories of analysis. I suggest that the ambiguity and contestability of Smith’s intentions as well as the slipperiness of the conceptual categories that he inspired have engendered shifting meanings, emergent problematics, and the enduring political relevance of his works and ideas.

In this chapter I argue that Adam Smith’s moral, social and economic thought was influenced by both Stoic and Epicurean sources with surprising and fruitful results. Although these schools of thought conflicted in most respects, Smith adopted and adapted elements from each to creatively construct a kind of ‘benign-realist’ social science able to explain the order of the human universe while comprehending humans as they really were rather than as we might wish them to be. By combining the Stoic idea that all of nature is both divine and benign with a pragmatic Epicurean moral psychology, Smith not only reconciles his own realist intuitions with his sincere faith in a designed universe, but produces a compelling account of how economies and societies should operate. I show this by exploring how Smith responded to the Stoic and Epicurean approaches to virtue, self-interest, benevolence, justice and our obligations to others, especially strangers and foreigners. I also explore how he applied an Epicurean sensibility to reimagine Stoic cosmopolitanism.

The Wealth of Nations is a stupendous palace erected upon the granite of self-interest. Thus George Stigler, and thus, with minor qualifications here and there, two centuries of misinterpretation of Adam Smith, especially by economists. To claim that Smith endorses the notion that people should, or inevitably do, act selfishly is severely to misread his text, especially in relation to other theories of human motivation at the time. That misreading arises, especially, from a misunderstanding of the famous “butcher and baker” paragraph in Book I, chapter ii of the Wealth of Nations – a misunderstanding that virtually inverts the true meaning of that paragraph. I explore the paragraph in depth here, commenting on sections of it line by line, so as to bring out what I take to be its overall argument. The result points, among other things, to a deep kinship, as well as certain significant differences, between Smith and Aristotle.

In Adam Smith’s Wealth of Nations, prescriptive and descriptive analysis are intertwined. While incentives analysis is strictly descriptive, the motivation of the analysis is prescriptive as are the motivations for its prescriptions. For Smith, wealth tends to promote justice; it also tends to be a consequence of justice. Poverty tends to create injustices instead, and to be a consequence of injustice. Understanding how to increase the wealth of a nation is thus understanding how to increase its justice. The perverse incentives of special interests are destructive forces of both wealth and justice. Smith called Wealth of Nations a violent attack against the British commercial system because, in the interpretation offered here, the entire apparatus of the British Empire was the result of those perverse incentives of special interest groups that not only generated inefficient monopolies but also, and especially, generated gross injustices for the weakest members of society.