Working Papers

Dissolving the Water-Diamond Paradox: A Conceptual Semantic Analysis of “Money” and “Value” in the Wealth of Nations

With Gian Marco Farese

We examine the conceptual semantics of two key words in Chapter IV of the Wealth of Nations: money and value (specifically, the exchangeable value of goods). Our semantic investigation of the original conceptualization of these words helps resolve interpretive misconceptions in modern economics and provides deeper insight into three of Adam Smith’s fundamental principles of economics. Using the Natural Semantic Metalanguage methodology, we offer semantic illustrations that clarify Smith’s treatment of money as the universal instrument of human economic transactions and illuminate the polysemy of value in the so-called “water-diamond paradox”. In doing so, we demonstrate the considerable semantic and conceptual complexity underlying these foundational economic concepts.

Humanomics and Human Action Explanations of Why Human Beings Divide Their Labor

Modern economics, whether in the orthodox tradition of Paul Samuelson or the heterodox tradition of Ludwig von Mises, ultimately looks to explain economic outcomes, that is, the effects of human action. In their own way, neither distinguish the consequences of human action from the origins of human action, and neither have any truck with ethical valuations and moral judgments as part of their modern subjective theory of value. If economics is to be about flesh-and-blood human beings, and why we do what we do, then we need an analytical framework that considers human action in its origin, rather than in just its outcome. Following Adam Smith’s lead, I explain the division of labor with a humanomics account that is moral all the way down.

On Explaining Why the (Human) World is Rich

The wealth of the modern world is a natural historical marvel.  Explaining it has traditionally been the purview of economic historians, as exemplified by the recent book How the World Became Rich by Mark Koyama and Jared Rubin.  But economic historians tend to only ask process-oriented “how” questions and “by what means” questions of the Great Enrichment. The eight co-authors of Explaining Technology, who are not economic historians, engage in the debate asking a different question.  Their goal is to explain the exponential shape of our enrichment with a model of the combinatorial evolution of technology.  With an eye toward how we ask questions of the Great Enrichment, the essay proposes broadening our inquiries to include questions typically overlooked in modern economic science, namely, “What form does it take? and “For what purpose?”