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Measuring “The Happiness of Nations”: The Conundrum of Adam Smith's “Real Measure of Exchangeable Value”


  • Terry Peach


Based on an appraisal of Smith's (nonutilitarian) understanding of happiness in The Theory of Moral Sentiments, this article considers the possible origin, meaning, and fate of the “real measure” qua index of social happiness/welfare. It is suggested that the original welfare usage was a measure of the happiness of laborers in terms of their “sacrifice” to obtain the necessaries and conveniences of life. However, although the welfare origins of the measure are discernable in The Wealth of Nations, it is argued that the real measure had come to be used by Smith for purposes that were related only indirectly, if at all, to the measurement of happiness/welfare. The article suggests reasons for Smith's abandonment of a welfare role for the standard, including the possibility that he had made a tactical decision to downplay his welfare concerns

Suggested Citation

  • Terry Peach, 2010. "Measuring “The Happiness of Nations”: The Conundrum of Adam Smith's “Real Measure of Exchangeable Value”," History of Political Economy, Duke University Press, vol. 42(3), pages 403-424, Fall.
  • Handle: RePEc:hop:hopeec:v:42:y:2010:i:3:p:403-424

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    Adam Smith; The Wealth of Nations; happiness;


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