The term “political oeconomy” in Adam Smith

Abstract

This article analyses the use of the term “‘political oeconomy” in the Wealth of Nations, considered by many the founding text of the discipline of Political Economy. It shows that Adam Smith could not accept the use of the term “political oeconomy” that had been made by other authors to indicate the subject matter of his scientific inquiry, devoted to the nature and causes of the wealth of nations; he used the term “political oeconomy” as a synonym for economic policy, especially in the fourth book of the Wealth of Nations. In order to understand this statement, it is necessary to keep in mind the methodological and epistemological perspective developed by Smith; in his view, the inquiry into the nature and causes of the wealth of nations would have to discover the almost unchangeable rules that presided over the choices of the legislators in the field of public economy and in the management of public resources. By contrast, the term “political oeconomy” was used by Smith exactly to indicate the policies really adopted in these fields, policies which frequently altered the system of natural liberty.