Sir James Steuart on Double Competition and Market Stability
This work examines the theory of price determination in Sir James Steuart, with a particular focus on the problem of market stability. The paper proposes a scheme of analysis in keeping with a view of exchange significantly different from classical and neoclassical theories – Steuart’s framework does not abstract money, merchant or state; price determination mechanism is a structured process inside a monetary circulation system that ensures transactions between agents. This allows us to distinguish between a supply-demand market adjustment, called ‘balance of work and demand’, and a competitive mechanism called ‘double competition’. This is an essential step in order to understand why this particular mechanism of interdependence fails to maintain a stable price, and how the statesman recovers the stability.
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