Adam Smith and the Economy as a System of Power

The wisdom of Adam Smith has as its preeminent monument the fundamental paradigm of modern economic theory. The Smithian view, as it has come to be articulated as the conventional paradigm of economics, encompasses the play of spontaneous economic activity, the allocation of resources through market forces, efficiency comprehended in terms of self-interest or personal maximization of well-being, and the regulatory hand of competition. While it is recognized that such harmony as is achieved in this system is very rough indeed and that the operation of the market takes place only within and as structured by the social control forces of morals, religion, custom, education, and the law,1 the Smithian world, as perceived through modern economics, is constituted by the interplay of individual economic actors engaged in voluntary exchange through the mechanism of a competitive market. Smithian economics is thus seen as the economics of a spontaneous, generally beneficent, powerfully productive economic system, analysed in terms of the impersonal forces of the market; it is the economics of individuals voluntarily choosing from among the opportunities available to them in such a way as to achieve a constrained maximization of their welfare.