Perfect liberty and justice, however, did not exist in the actual markets known to Smith, making expectations of perfect factor mobility idealistic, not realistic; they remained his theoretical constructs. Smith’s narrative is a benchmark for, not a description of, the real world. Smith elaborates on variations between perfect and real world markets, and I shall untangle the narrative in what follows as a prelude to commenting on the laissez faire problem in economics — that there are two distinct interpretations of what it means as a policy prescription, neither of which accords with Smith’s views. Together they explain why he did not refer to laissez faire, nor subscribe, implicitly or otherwise, to prescriptions associated with it.
KeywordsWage Rate Policy Prescription Wage Determination Happy State High Living Standard
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