Belonging, Moral Economy, and Effective Demand: Reinterpreting Adam Smith for Inclusive Development

Obregon Diaz, Carlos Federico (2026): Belonging, Moral Economy, and Effective Demand: Reinterpreting Adam Smith for Inclusive Development.

Abstract

This paper reconstructs Adam Smith’s moral philosophy as a theory of social coordination grounded in moral sentiments and institutional structures, and extends it through the Economics of Belonging. It argues that economic participation depends on structures of belonging that integrate individuals into institutional systems.

The paper develops a framework in which effective demand is understood as the economic expression of belonging, and the middle class as its structural carrier. It shows that sustained economic development depends on the expansion of socially integrated participation rather than solely on capital accumulation.

The analysis contributes to institutional economics, moral economy, and development theory by providing a unified framework linking ethics, institutions, and macroeconomic dynamics.

• Item Type: MPRA Paper
• Language: English
• Keywords: Belonging; Effective Demand; Moral Economy; Adam Smith; Institutional Economics; Middle Class; Economic Development; Inclusion
• Subjects: B - History of Economic Thought, Methodology, and Heterodox Approaches > B1 - History of Economic Thought through 1925 > B12 - Classical (includes Adam Smith); B - History of Economic Thought, Methodology, and Heterodox Approaches > B4 - Economic Methodology > B41 - Economic Methodology; D - Microeconomics > D6 - Welfare Economics > D64 - Altruism ; Philanthropy; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O11 - Macroeconomic Analyses of Economic Development; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O15 - Human Resources ; Human Development ; Income Distribution ; Migration; Z - Other Special Topics > Z1 - Cultural Economics ; Economic Sociology ; Economic Anthropology > Z13 - Economic Sociology ; Economic Anthropology ; Social and Economic Stratification

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