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.

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 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.

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.

Geoffrey Colin Harcourt’s work on the interface between accountancy and economics is a part of his legacy that is less well-known than his work on the capital controversies. This paper argues that the analytical findings of this research effort are an important and integral part of Harcourt’s overall research programme. In this paper, we review Harcourt’s work on the relation between economics and accounting from the time of his undergraduate thesis to 1969, the date of the publication with Robert Parker of the edited volume Readings in the Concept and Measurement of Income. This paper intends to offer insights on (A) the evolution of Harcourt’s thought during this period and a survey of the significant contributions he made to research in this field during this time and (B) the legacy of his approach and findings. We argue that his ideas in this domain offer important insights in doing post-Keynesian economics in the Harcourt mould. We find that Harcourt’s insights on the issues relating to the accounting rate of profit as used by economists remain relevant to today, as well as his implicit suggestions on how to deal with the complexities of the problems that ensue for the theorist, practical economist, businessman, and policy advisor. Harcourt’s work suggests that we should not aim to replace one monolithic way of seeing things with another, indicating that the useful definition of key concepts and tools is determined by the problem and hence by the policy question one wants to answer.

The life and work of Pasinetti is overviewed by the founding scholar of computable economics, who observed this Italian economist’s formative years at Cambridge University. Folding in tributes from three further scholars, the obituary identifies Pasinetti’s contribution to capital theory, his view of the macro foundations of microeconomics, his focus on production rather than exchange, and his separation of theoretical and institutional economic analysis.

Geoff Harcourt was a renowned economist and political activist who made a significant contribution to public policy, particularly in his home country of Australia. As a leading contributor to post-Keynesian theory, he believed a capitalist economy would not create full employment without significant policy intervention. On the labour market, he devised an approach to wage bargaining that integrated fairness with productivity growth in the context of Australia’s unique institutions of conciliation and arbitration. On tariff protection, he was agnostic, preferring a more proactive industry policy grounded in post-Keynesian principles and drawing on his early work on accounting theory and practice. His economic advice to the Australian Labor Party (ALP) Committee of Inquiry in 1979 refocused policy debate around the role of incomes policy, which became the centrepiece of the Hawke-Keating Government’s Accord with the trade union movement.

In this article, I share insights from the conversations I have enjoyed with my father GC Harcourt on gender, social justice, and economic policy in the last years of his long and fruitful life. Our conversations reflected our overlapping but at times divergent responses to the disruptions caused by environmental, climate, health, economic, and political crises. The article reflects on our conversations around population, alternatives, the pervasiveness of racism in Australia, and the recurring questions of how to bring about change and how to continue despite political disappointments. The article teases out in a gentle way how my perspective, as a feminist political ecologist, diverged from GC Harcourt’s views, and what our conversations together suggest as important challenges to overcome as we confront the current crises of modern capitalism.

In The Great Transformation, Karl Polanyi problematised the commodity status of labour. He described it as ‘fictitious’ and asserted the human aspect of labour necessitates ‘protection’. In bringing Polanyi’s mature works to bear on these claims, this article uses the ‘fictitious commodity’ concept to highlight the tension in neoclassical theory between concrete reality and its idealist construction of the economy. This contradiction directly challenges the veracity of the self-regulating market. The article develops two related themes. The first is Polanyi’s critique of the neoclassical conception of ‘the economy’ as an ideal (market) construct which gave rise to the notion that labour could be regulated by the forces of supply and demand. The second is the lack of logic in the notion of a ‘self regulating’ market and Polanyi’s appreciation of the concrete tendencies of capitalist economies to develop institutional arrangements that ensure the economy is always, and necessarily, more than ‘the market’.

This year marks the 200th anniversary of the birth of Karl Marx, the last of the classical political economists. This article aims to mark the occasion by drawing attention to some of his key works in economics and to present some of his ideas in a way that will make sense to readers not familiar with or very much interested in the complexities of the labour theory of value. I begin with a brief biography and a summary of his main works in economics. I then explore in some detail ideas related to the economic surplus, unpaid labour and exploitation, and attempt to tease out the implications of his analysis for the determination of the wage share. While I argue that Marx has not succeeded in providing adequate theoretical support for his prediction that the wage share will fall as capital accumulates, he has nonetheless provided a very interesting and insightful collection of ideas by which we may, even today, approach a wide range of issues relating to production and distribution.

An earlier ‘conversation’ with Professor J.W. Nevile was published in Essays in Economics, in Honour of Professor J.W. Nevile: Presented to Him on His Retirement. We now bring the story up to date covering the period roughly between Nevile’s appointment as Emeritus Professor at the University of New South Wales in 1993 to the present.

In his seminal 1921 book, Risk, Uncertainty, and Profit, Frank Knight distinguished uncertainty and risk. This paper applies Knight's concept of uncertainty to knowledge generated in incumbent organizations to explain the inherent difficulty in assessing potential innovations along with the key role played by knowledge spillover entrepreneurship as a conduit for transforming new knowledge created by an incumbent organization but ultimately commercialized through the creation of a new firm and innovation. Knowledge is inherently uncertain and constitutes what is characterized as the knowledge filter impeding innovative activity in the context of incumbent firms and organizations. The organizational and institutional context and market uncertainty can either facilitate or impede the spillover of knowledge from the firm where it was created to the entrepreneurial startup where it is transformed into innovation. The empirical evidence based on a large, unbalanced panel of 9,126 UK firms constructed from six consecutive waves of a community innovation survey and annual business registry survey during 2002–2014. Implications for managers, scholars, and policymakers are provided.

In Risk, Uncertainty and Profit (RUP), Knight (1921) develops a theory of the firm that stresses the important role of entrepreneurial judgment for a firm's success. For Knight, entrepreneurial judgment is first and foremost the selection of ‘proxy entrepreneurs’ who are capable of making good judgments under uncertainty. In this sense, entrepreneurial judgment is essentially ‘judgment of judgment’. An overlooked implication of Knight's position is the fact that it leads to an endorsement of distributed entrepreneurship and responsibility. We deem this a very modern idea that challenges a completely hierarchical understanding of the firm. Knight himself does not thoroughly examine the institutional implications of the analytical framework he sets up in RUP. In this paper, we summarize the ‘philosophical vision’ of Knight's framework and illustrate his rationale behind the distribution of entrepreneurship. We conclude the paper with a discussion of potential institutional implications by referring to the danger of monocultures, the additional value created by cognitively diverse teams, and the effectiveness of venture capitalists.

Formal economic models of entrepreneurship have two characteristics: they model entrepreneurship as an allocation of resources, and they identify common factors affecting this allocation. These common factors are represented as parameters of optimization models, and they are evaluated at the market level. We argue that although these models are useful, they are incomplete because certain aspects of entrepreneurial behavior, such as judgment, alertness, or innovativeness, cannot be easily transformed into allocative problems. Moreover, entrepreneurial acts involve idiosyncratic elements, which limit the applicability of the market-level analysis to individual cases. Thus, the traditional economic methods have to be complemented by approaches highlighting the role of individual and historical specificity. The study of entrepreneurship, therefore, requires a synthesis of both general theory and historicist approaches, as envisioned a century ago by Frank Knight.

In the last few years Keynes's investment activity, both as an individual trader and as a manager of institutions’ portfolios, has attracted attention in the specialised literature. Recently his investments on Wall Street, in particular – both on his own account (Cristiano, Marcuzzo and Sanfilippo 2018) and on behalf of King's College, Cambridge (Chambers and Kabiri 2016) – have been analysed, and the evident connection with his theoretical analysis of the functioning of the financial markets contained in chapter 12 of The General Theory has been duly stressed. This article aims to contribute to a more comprehensive understanding of Keynes's trading behaviour on Wall Street by providing a detailed comparison of his investment choices when he traded for himself and for King's. There are similarities, as might be expected, but also significant differences, well worth investigating. As far as the differences are concerned, one of the most striking is to be seen, for instance, in his attitude when, after a period of bull market in 1936, he had to face the spring 1937 burst of the speculative bubble and subsequent recession. Analysis of his behaviour in this specific case reveals that the event took him by surprise but his reaction differed with regard to his personal investments and the King's investments. The prevalence of a ‘buy and hold’ strategy, which, according to Chambers and Kabiri's reconstruction (2016), marked Keynes's behaviour in general (and also in this particular case) when he invested on behalf of King's, was not always his typical choice when the investments were undertaken on his own account. A tentative explanation of this result, which is also grounded on some different features characterising the two portfolios and not sufficiently investigated in previous studies, is at last provided in the article.

El Tratado de Economía Política de Jean-Baptiste Say es la obra de Economía de mayor impacto en el siglo XIX en España, por su notable influencia en los debates parlamentarios y en la docencia. Quizás debido a este éxito y a las diferentes ediciones y traducciones realizadas, se percibe un cierto desconcierto en las numerosas referencias bibliográficas sobre esta obra. Este trabajo pretende aclarar tanto la reiterada confusión sobre las diferentes ediciones en español del Traité como las dudas sobre sus traductores que, en algunos casos, se veían obligados a ocultar su identidad por los obstáculos a la libertad de prensa. También encontramos que la obra de Say se traduce dentro de dos proyectos editoriales; uno docente, vinculado a la Real Sociedad Económica de Amigos del País, y otro político que permitió aprovechar el trienio liberal para poner nuevas ideas al servicio de los legisladores y de los estudiantes.

Whereas many others have scrutinized the Allais paradox from a theoretical angle, we study the paradox from an historical perspective and link our findings to a suggestion as to how decision theory could make use of it today. We emphasize that Allais proposed the paradox as a normative argument, concerned with ‘the rational man’ and not the ‘real man’, to use his words. Moreover, and more subtly, we argue that Allais had an unusual sense of the normative, being concerned not so much with the rationality of choices as with the rationality of the agent as a person. These two claims are buttressed by a detailed investigation – the first of its kind – of the 1952 Paris conference on risk, which set the context for the invention of the paradox, and a detailed reconstruction – also the first of its kind – of Allais’s specific normative argument from his numerous but allusive writings. The paper contrasts these interpretations of what the paradox historically represented, with how it generally came to function within decision theory from the late 1970s onwards: that is, as an empirical refutation of the expected utility hypothesis, and more specifically of the condition of von Neumann–Morgenstern independence that underlies that hypothesis. While not denying that this use of the paradox was fruitful in many ways, we propose another use that turns out also to be compatible with an experimental perspective. Following Allais’s hints on ‘the experimental definition of rationality’, this new use consists in letting the experiment itself speak of the rationality or otherwise of the subjects. In the 1970s, a short sequence of papers inspired by Allais implemented original ways of eliciting the reasons guiding the subjects’ choices, and claimed to be able to draw relevant normative consequences from this information. We end by reviewing this forgotten experimental avenue not simply historically, but with a view to recommending it for possible use by decision theorists today.

Two scientists and sailors from the Spanish Navy, Jorge Juan and Antonio de Ulloa, the Italian sailor and explorer Alessandro Malaspina, and the German sage Alexander von Humboldt were the main actors in three great voyages to Spanish America between the second-third of the 18th century and the beginning of the 19th century. This enabled them to provide three first hand «photographs» of the state of the Spanish empire in America at three different moments in time: approximately before, during and after the implementation of colonial reforms designed in the reigns of Ferdinand VI and Charles III. This work aims, in the first place, to compare the socio-economic views of Spanish America deriving from the three expeditions, highlighting similarities and differences. Second, this work aims to connect the analysis of the weaknesses of the politico-institutional organisation of Spanish colonies, which the four travellers did at first hand, with the present debate on the role of colonial institutions in long-term economic development.