In the October essay of the Adam Smith 300 essay series for Capital Matters, Anne Bradley of The Fund for American Studies writes about her experience teaching economics to college students. “Today’s mainstream and elite universities do not give Smith the attention he deserves,” she writes. Bradley continues:

Whether I am teaching undergraduate or graduate students, we always begin with human nature and Adam Smith. We can’t start with trade deficits or even demand curves before we understand what we are trying to do as economists. Economics is the study of how humans make decisions under conditions of scarcity and uncertainty. Even on our best day, we never have the complete knowledge necessary to make the best decisions.

This is where we must begin our study and teaching of economics — with the human person — and that is what Smith does. Economists today talk about “human capital,” the resources such as education, skills, and knowledge that are the essential to economic development and wealth creation. Smith scholar Deirdre McCloskey reminds us that human capital is “the stuff between your ears.” It’s the potential for unleashing ideas and using your gifts to contribute to the common good. Before Smith’s time, people were often told, and often experienced, a different story. We were stuck in zero-sum social and economic games wherein the strongest survived because they could use their strengths to exploit rather than serve others. Plunder and poverty were the status quo.

Smith showed the way to break out of the poverty equilibrium. The path to development lies in two things: Everyone has human capital, and with the appropriate institutional environment, everyone faces incentives that promote positive-sum games or mutual human prosperity. Today, the ordinary person is 20 to 100 times better off than their ancestors in 1800, 24 years after the publication of the Wealth of Nations.

Read the whole thing here.