Liberty and Equality in Political Economy

Liberty and Equality in Political Economy

From Locke versus Rousseau to the Present

New Thinking in Political Economy series

Nicholas Capaldi and Gordon Lloyd

Liberty and Equality in Political Economy is an evolutionary account of the ongoing debate between two narratives: Locke and liberty versus Rousseau and equality. Within this book, Nicholas Capaldi and Gordon Lloyd view these authors and their texts as parts of a conversation, therefore highlighting a new perspective on the texts themselves.

Chapter 3: Adam Smith and the System of Natural Liberty

Nicholas Capaldi and Gordon Lloyd

Subjects: economics and finance, history of economic thought, political economy, politics and public policy, political economy


Adam Smith was part of a remarkable period of intellectual ferment now known as the Scottish Enlightenment. His closest friend both personally and intellectually was David Hume, arguably the greatest philosopher to write in the English language. We shall focus on Smith both because from the point of view of the Two Narratives there is no significant difference and because Smith’s Wealth of Nations (1776), over 1000 pages long, has been the most or certainly one of the most influential works in political economy. Before moving to that work we pause to note some important philosophical preconceptions shared by Hume and Smith. Both are quintessentially modern thinkers. Epistemologically and metaphysically, Hume anticipated the Copernican Revolution in philosophy, as Kant himself acknowledged. Despite his reputation as an alleged empiricist and skeptic, the whole point of Hume’s epistemology is that knowledge is not a matter of reproducing in our mind external structures but in structuring our experience both psychologically in terms of the association of ideas and in terms of customary social practice. And, while reason may be the slave of the passions, our greatest mental asset is the imagination. For the first time in Western thought, the imagination in Hume and Kant becomes a positive force – not a disorienting liability. It is our capacity to imagine (even “feel” within), the perspective of others or of some abstract social perspective, that allows us to share the social world even beyond the narrow range of a natural benevolence.

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