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We trace how Adam Smith solves a historical puzzle: why Europe’s path to prosperity inverted the “natural order,” and how commerce quietly dissolved feudal power to make room for liberty. The story follows incentives, from primogeniture and entail to charters, free towns, and the market’s “silent and insensible” revolution.

• institutions as congealed preferences and elite incentives
• why Smith’s natural order inverts in Europe
• the physiocrats’ growth model and Smith’s critique
• Solow’s technology vs North’s institutions vs McCloskey’s ideas
• Joel Mokyr's synthesis and improvement (written BEFORE he Nobel'ed!)
• feudal constraints primogeniture and entail suppressing agriculture
• towns as islands of order through charters and fixed rents
• the king–burgher alliance against barons
• merchants as improvers of land and capital risk-takers
• commerce introducing liberty and good government
• Smith’s “most important” passage and its modern relevance

If you have questions or comments, or want to suggest a future topic, email the show at [email protected] !

You can follow Mike Munger on Twitter at @mungowitz