Public Welfare and Economic Growth

Abstract

Adam Smith's focus on the needs and wants of the general consumer is only conceivable in a context in which the value of labour has increased much faster than the value of everything else. History suggests that this happens best in a context of public infrastructure investment and human capital cultivation. An economics that accounted for the overlooked contributions of care work to the production of the labour force; that recognised the output benefits of publically funded networks of social services; that valued time spent outside of paid work at more than the zero estimate that current GDP calculations assume; that supported spending on well-crafted infrastructure investments; and that valued for its own sake the quality of life available to all; would go a long way toward realising the hopeful vision that Adam Smith first articulated at the dawn of the age of modern economic growth.

Keywords:

• classical economic thought
• economic growth
• human capital

JEL classification:

• O15
• B12

Notes

²These calculations can vary considerably from one year to the next depending on fluctuations in the spot prices of gold and silver, and future prices for wheat. However, the order of magnitude never changes. Costing out the voyage in contemporary carpenter's wages makes a modern version of the same voyage financially ruinous.

³See especially Chapter 10 of Volume 1 and Chapter 18 of Volume 2.