Markets, Productivity, and Happiness in a Historical Perspective

Natural Philosophy in the Wealth of Nations

Andrews David, State University of New York at Oswego

Adam Smith wrote in the idiom of natural philosophy. We see this, for example, in his focus on the “nature and causes” of national wealth, his references to the “great purposes of nature” and his description of the central concepts of his political economic theory in terms of nature: “natural price,” “natural liberty” the “natural rates” of income distribution. According to Alfred Marshall, however, Smith’s use of the language of natural philosophy detracted from Smith’s economic theories, tying him to “eighteenth century metaphysical notions as to Nature” from which Smith “had not completely freed himself” (1885, 21). Marshall therefore completed Smith’s liberation by severing Smith’s economic theories from his idea of nature, as he substituted his own concept of “normal price” for Smith’s “natural price.” This paper takes the opposite approach. It explores Smith’s “metaphysical notions” within their historical context, without treating the idea of nature as something from which it is necessary for Smith to be freed. From the thirteenth century to the nineteenth, natural philosophy provided the organizing framework for scientific understanding in European universities based on Aristotle’s sense of nature as the source of motion interior to a natural entity or being. The domination of Aristotle’s idea of nature raises the possibility that this might have been Smith’s as well. From this standpoint the paper examines not only Smith’s use of the words “nature” and “natural,” but also characteristic elements of Smith’s theory which have roots in Aristotle’s works: national wealth construed as annual production rather than as money, the inherent sociality and mutual dependence of human beings, the division of labor, the distinction between use value and exchange value, labor and capital. Smith expressed himself in the idiom of natural philosophy based on Aristotle, but the two lived under economic and social conditions that were quite different, leading Smith often to different conclusions.


Keywords: Adam Smith, Natural Price, natural philosophy, nature, natural liberty

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