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ADAM SMITH’S SYSTEM OF NATURAL LIBERTY: COMPETITION, CONTESTABILITY, AND MARKET PROCESS

Published online by Cambridge University Press:  11 May 2010

MICHAEL E. BRADLEY
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Abstract

In this article, I argue that Adam Smith’s system of perfect liberty contains some of the seeds of perfect competition, but that the modern perfectly competitive model differs from Smith’s perfect liberty in some important respects—in particular, the role of active competition among firms and the role of the entrepreneur. The article examines the analytical linkages between Smith’s system of liberty and three strands of modern economic theory—neoclassical perfect competition, contestable market theory and the Austrian analysis of market process.

Type
Research Articles
Information
Journal of the History of Economic Thought , Volume 32 , Issue 2 , June 2010 , pp. 237 - 262
Copyright
Copyright © The History of Economics Society 2010

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