On the promises and perils of Smithian growth – from pin factory to AI

Marcus Miller

CAGE Online Working Paper Series from Competitive Advantage in the Global Economy (CAGE)

Abstract: For path-breaking insights on how prices can guide the efficient allocation of resources and on how innovation and investment can spur economic growth, Adam Smith is justly renowned. He was, however, well aware of problems posed by market dominance - specifically in banking and, more generally, wherever getting to the scale that delivers increasing returns leads to monopolistic behaviour. For the historical record, we draw on the recent wide-ranging survey by Acemoglu and Johnson on how the benefits of innovation have been spread across society since the Industrial Revolution. We also consider these issues in the context of geo-political competition.

Keywords: The Wealth of Nations by Adam Smith; Increasing Returns to Scale; monopoly; excess risk-taking; case studies of economic history; geo-political competition JEL Classification: B12, D61, E25, L12, O33, P51 (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-gro and nep-his
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Persistent link: https://EconPapers.repec.org/RePEc:cge:wacage:678

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