Whose Adam Smith? The limits of law’s action

Abstract

Adam Smith has usually been regarded as having provided the key planks on which to develop liberist and ordoliberal visions. By means of taking seriously Smith’s legal theory, it is here argued that a different reading is plausible and preferable, in which the elements with which to defend a radical transformation of the socio-economic order emerge. The argument starts by identifying two fundamental insights in Smith’s work, namely (1) the characterization of human beings as norm producers and norm followers, who systematically raise claims to normative correctness; and (2) the affirmation of a creative tension between (methodological) individualism and the social constitution of human beings. On such a basis, it is argued that the author of The Theory of Moral Sentiments emphasized not only the fact that modern law is a social creation, but also the structural association between law and other means of social integration, in particular both positive and critical morality. This leads Smith to highlight the constitutive role that modern law plays in the creation and reproduction of modern socio-economic structures. Consideration is then given to the main reasons why Smith has been regarded as one if not the fundamental source of liberist and ordoliberal thinking. While such readings are plausible, or at least partially plausible, they fail to consider the extent to which the identification of the socio-economic constitutive role of law highlighted by Smith can be relied upon to imagine new and different socio-economic orders.