Markets, Productivity, and Happiness in a Historical Perspective

The Importance of the Four Stages Theory for Adam Smith's Wealth of Nations

Lange Jérôme, University of the Witwatersrand

For as long as there has been scholarship about Smith, starting with his first biographer Dugald Stewart, the role of his philosophical history – christened by Stewart “Conjectural or Theoretical History” – has been debated. Stewart himself had attributed great importance to this “method” for the entirety of Smith’s œuvre. Yet, in the two and a quarter centuries since, the theory has not been given much attention in the interpretation of Smith’s oeuvre. An increasingly “economicist” reading of the Wealth of Nations, as a corollary to an economics discipline that became increasingly technical and disconnected from the Humanities and Social Sciences as a whole, contributed to this neglect. From about the mid-20th century, a revival of Smith-scholarship took place, in line with a new edition of the entirety of his work that specifically looked for links between the different parts of it, lead by a number of prominent historians of economic thought, among whom Ronald Meek, who coined the term “four stages theory”, giving a new name to Stewart’s Conjectural History. To this day, however, economists and historians of economic thought dispute that the four stages theory plays an important role in The Wealth of Nations (see notably Hollander 1978/1996, and more recently Okan 2017). These contributions rely on a disconnected view of Smith’s work, which is inherited from the notorious “Adam Smith Problem” developed by romantic scholars in the 19th century. While this view originated in Germany among a particular intellectual movement – the German Historical School – that is generally thought to be quite antagonistic to mainstream economics as today practised, German scholars of the late 19th century in fact strongly influenced early 20th century American economist. With the United States progressively becoming the epicentre of economic thinking in the 20th century, the disjointed view of Smith’s work, while today rejected by most historians of thought, lives on in the conception of Smith of most economists. This paper retraces this history (the intellectual history of the four stages theory, and its relationship with the history of the economics discipline) and underlines the importance of the four stages theory in the Wealth of Nations by textual analysis and comparison with the Lectures of Jurisprudence.


Keywords: Adam Smith Problem, Wealth of Nations, Conjectural History / Four Stages Theory, Economics Discipline, Transatlantic Intellectual History