Vanity and Luck in Adam Smith's Economic Growth

Paganelli, Maria Pia

doi:10.1215/00182702-10005732

Cited by 2 publications

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“…Accidents, on the other hand, are by their nature unpredictable and not directly controllable. Therefore, Smith reminds us to be humble and recognize our potential inability to shape growth, as some conditions are outside our control; they are accidental (Paganelli, 2022; see also Arthur, 1989;North, 1990;Acemoglu, Johnson, & Robinson, 2001;Alston, 2017).…”

Section: Luckmentioning

confidence: 99%

From “dull” to “cheerful”: the relevance of Adam Smith for today

Paganelli

2024

ECON

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PurposeIs there a secret recipe for economic growth?Design/methodology/approachNo, there is no recipe, but we can extrapolate some pieces of advice from Adam Smith.FindingsAn economy can leave behind its “dull” stagnant state and grow when its markets expand, when the productivity of its workers increases thanks to high compensations, which are seen as incentives to work harder and when lobbying and cronyism are kept at bay. Luck plays a role too, but these three ingredients are necessary, even if not sufficient, for an economy to grow and thus be “cheerful.”Originality/valueThese three aspects – expansion of market, liberal compensation of workers and lobbying – especially combined, have often been underestimated in Smith’s understanding of the possible sources of economic growth.

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Section: Luckmentioning

confidence: 99%

From “dull” to “cheerful”: the relevance of Adam Smith for today

Paganelli

2024

ECON

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“…Smith argued that to better understand the early development of political economy it is necessary to read Smith's Theory of Moral Sentiments and his contemporary Adam Ferguson as well. Paganelli explored Smith's writing on vanity and luck as factors facilitating economic growth. These two factors, according to Smith, help to explain, alongside other factors, prosperity.…”

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confidence: 99%

Review of periodical literature for 2022: (iv) 1700–1850

Hutková

2024

The Economic History Review

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The topic of wages, living standards, and the working week attracted considerable attention. Horrell, Humphries, and Weisdorf introduced a novel framework for evaluating real household incomes of English rural working families in the years 1260−1850. They identify the key weakness of studies in economic wellbeing as the fact that family income has been equated with the husband's earnings alone, yet a model with a male breadwinner does not fit well with historical realities of the pre-modern world. The authors took a life cycle approach to resources available to families across the cycle. On the basis of demographic evidence for 1541−1850 that traces changing fertility and dependency and using data on women's and children's earnings, the authors study trends in wellbeing for different types of families and over the long run. Their model goes beyond the male-breadwinner type of family as they also capture families that do not have an adult male earner as the breadwinner. The authors found that intact average-size working class families were able to attain respectability from the eighteenth century onwards without reliance on poor relief and/or child labour. They also found that before the eighteenth century, in the case of families in which men were not capable to earn, women and children's earnings were an even more essential source of income than in the post-eighteenth-century period. On the basis of the demographic data in their model, the authors then equate the expansion of child labour and poor law expenditure in the late eighteenth and early nineteenth centuries with the great share of large families and fatherless or non-earning father families in the period. However, they find that the living standard of these type of families -large, fatherless, or with a father who is not a capable earner -started to increase at the turn of the eighteenth century. At the same time, very small families with very few children and a father/husband who was not capable of earning found it challenging to attain respectability in late eighteenth and early nineteenth centuries. Crafts and Mills estimate a structural model of economic-demographic interactions for 1570-1850 to study the effect of population growth on wages. On the basis of the simulations of their model, the authors conclude that growth of real wages during the Industrial Revolution was constrained by high population growth. They thus argue that workers benefitted from the Industrial Revolution immediately since without the technological change their living standards would have decreased further. They disagree with interpretations that ascribe the limited wage growth to Marxist exploitation and/or technological

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Vanity and Luck in Adam Smith's Economic Growth

Cited by 2 publications

References 56 publications

From “dull” to “cheerful”: the relevance of Adam Smith for today

From “dull” to “cheerful”: the relevance of Adam Smith for today

Review of periodical literature for 2022: (iv) 1700–1850

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