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Liberty and Economic Growth in Adam Smith’s Possible World

Abstract

Constitutional economics proposes and pursues a solution to public-policy problems, one that supplies rules designed to narrow the opportunity set of rational politicians. This work proposes and pursues “rational policy” as a complementary strategy to solve public-policy problems, where rational policy is public-policy that actualizes Adam Smith’s simple system of natural liberty. When individuals pursue their objectives by means of exchange in Smith’s simple system of natural liberty, they foster the growth of per-capita income. By contrast, all limitations on liberty limit the growth of per-capita income. The paper concludes by presenting two implications that follow from these conclusions.

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Correspondence to Mark Jackson.

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JEL classification: B31, H1

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Jackson, M. Liberty and Economic Growth in Adam Smith’s Possible World. Constit Polit Econ 16, 277–284 (2005). https://doi.org/10.1007/s10602-005-2834-1

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  • DOI: https://doi.org/10.1007/s10602-005-2834-1

Keywords

  • liberty
  • Adam Smith
  • growth