SCHUMPETER’S ASSESSMENT OF ADAM SMITH AND THE WEALTH OF NATIONS: WHY HE GOT IT WRONG

Abstract

In his widely read and cited History of Economic Analysis (Schumpeter 1954), Joseph Alois Schumpeter dismissed Adam Smith’s Nature and Causes of the Wealth of Nations (Smith 1976a) in a blunt and often ad hominem manner. In fact, he even questioned Smith’s intellectual mettle. We argue that Schumpeter’s assessment might have resulted from his failure to appreciate the rhetorical structure of Smith’s masterpiece (and the highly political character of its Book V), a failure possibly due to Schumpeter’s not having access to student notes of Smith’s lectures on rhetoric that surfaced only after Schumpeter’s death. We argue that Schumpeter’s failure to appreciate the rhetorical structure of Smith’s masterpiece is a prominent example of the consequences of not taking into account Smith’s rhetorical strategies and principles when trying to understand the man and his oeuvre.