Adam’s Fallacy Did Adam Smith produce fallacy or has fallacy been thrust upon him?duncan Foley's

Abstract

Duncan Foley, a leading heterodox economist, criticizes Adam Smith for narrowness in three respects: his definition of the economy, his notion of the central problem of economics, and his conception of correct policy making. For the most part, this is a misreading of Smith; the charge of fallacy should be attributed to mankind as a whole and especially the economists who followed him, not Smith himself. Yet, although Smith evidently did not feel that matters would work out as they did, he identified and emphasized both the causal mechanism for the narrowness and the motive behind it. The causal mechanism is the division of labor and the motive is status emulation—the quest for social recognition and moral approval, if not also power—achieved through the belief that more goods are better than fewer goods—all induced by the great deception that wealth is important, thereby leading people to frenetically better their condition. The genius of Smith was to have articulated the material and conceptual baggage accompanying the newly arrived commercial stage of Western civilization. Still, it is rather difficult to ascertain what of Smith's account is provided by his study of the stage itself and what is due to his own imagination.

Citation

Samuels, W.J. (2008), " Adam’s Fallacy Did Adam Smith produce fallacy or has fallacy been thrust upon him?duncan Foley's", Samuels, W.J., Biddle, J.E. and Emmett, R.B. (Ed.) A Research Annual (Research in the History of Economic Thought and Methodology, Vol. 26 Part 1), Emerald Group Publishing Limited, Leeds, pp. 153-160. https://doi.org/10.1016/S0743-4154(08)26015-3