Smithian Growth and Complexity

Abstract

In this paper we argue that Adam Smith’s theory of division and labor and economic growth, in particular through the developments of Alfred Marshall, Allyn Young and Nicholas Kaldor, has characteristics that allow to classify it in the realm of complexity economics. We support this claim by a historical reconstruction of the Smithian growth theory highlighting the characteristics that we show also characterize complex systems. We compare this perspective with the one developed by the traditional economic approach, rooted in general equilibrium, and describe a simple alternative model