A Statistical Equilibrium Approach to Adam Smith’s Labor Theory of Value


Adam Smith’s inquiry into the emergence and stability of the self-organization of the division of labor in commodity exchange is considered using statistical equilibrium methods from statistical physics. We develop a statistical equilibrium model of the distribution of independent producers and produced commodities in a hub-and-spoke framework that predicts the both the center of gravity of producers across lines of production as well as the endogenous fluctuations between lines of production that arise from the institutional constraints of ``perfect liberty" and free competition. The ergodic distribution of producers implies the convergence of market prices to Smith’s natural prices.

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Bruno Miller Theodosio
Bruno Miller Theodosio
PhD candidate in Economics

Bruno Theodosio is a PhD candidate in Economics at The University of Utah. Bruno Theodosio has research interests in Political Economy, Statistical Equilibrium models and Macroeconomics.