Attempted Adam Smith Smackdown Watch: Truck, Barter, and Exchange
Hoisted from Comments: Kevin Quinn writes:
Seminar: Matt Ridley: How Prosperity Evolves - Grasping Reality with Both Hands: Like James C. I find it prima facie puzzling that Smith appeals to what he clearly means to be a "disposition to truck and barter" for its own sake. Why isn't self-interest plus differences in opportunity costs across people enough to get the ball rolling? Here is what I think is the answer: Smith sees most of the differences between people in productive ability to be the result of, not the pre-condition for specialization. I become good st x by specializing in x as you become good at y by specializing in y. So Smith wants, in effect, to rule out the sub-optimal equilibrium in which no one specializes, so there are no significant differences between us, so there is no incentive to specialize. That's what a non-instrumental propensity to truck and barter does - or so it seems to me.
Smith appeals to a natural propensity because he believes in a natural propensity.
"Self interest plus differences in opportunity cost" doesn't get the butcher providing you with meat in exchange for money: it gets the butcher slaughtering you, selling you as long pig, and then bribing the policeman to look the other way with an order of ribs.
And what "self interest plus differences in opportunity costs" gets you from the barber does not bear thinking about...
