The impact of the physiocratic ideas on Smith's 'Wealth of Nations'

The dissertation deals with the extent of the physiocratic influence on the development of Smith's economic argument of The Wealth of Nations . The existing literature on this issue downplays this influence by omitting the crucial moment in the development of Smith's ideas, namely, the theoretical confrontation of his original argument in his Glasgow Lectures and not that of The Wealth of Nations, with the physiocratic theory of wealth. It is this confrontation that this dissertation brings to the fore in order to assert the extent of the physiocratic influence on Smith's ideas.;Basically, I show that the Physiocrats impose a challenge to Smith's theory of opulence with their conception of economic activities forming a self-regulating system. Thus, in contrast to his idea of an abundant supply of goods whose magnitude is undetermined except indirectly by their low prices, Smith finds in the physiocratic analysis the possibility of determining this magnitude, and the logical necessity of this determination, in order to give a consistent explanation of its distribution among individuals as members of economic classes rather as members of classes of specialized labor. From the point of view of Smith's original argument, the key for attaining this logical consistency was in the physiocratic conceptual transformation of stocks into capital and of labor into productive labor. However, for Smith, this transformation implies changing his original conception of the economic organization of production in which individuals are taken to be independent workers to the physiocratic one of entrepreneurs and workers in general. This theoretical operation marks the shift in Smith's economic argument from the Lectures to The Wealth of Nations which includes the critical adoption of the physiocratic concept of productive labor and the introduction of Smith's concept of real price for defining annual revenue as the sum of wages, profits and rent.;Therefore, the dissertation's basic conclusion is that the physiocratic concept of the economic organization of production opened up a new theoretical agenda for Smith which drastically altered both his conceptual structure and the object of analysis of his economic argument.