ABSTRACT
This chapter tracks the breakdown of Adam Smith's unitary vision of social life into a split between household and business, and its implications for measurement. The household/business split was strongly affected by the romantic reaction to the Enlightenment. Adam Smith, in good Enlightenment fashion, developed a holistic theory that did not hive economy off from the rest of society. Romantic critics found this work tediously dry, lacking in religious faith and feeling, patriotism, and national culture. In his 1759 Theory of Moral Sentiments, Adam Smith worked out a psychology based on sympathy. Socialized humans judged the actions of others, and learned that others judged their behavior. Smith's key nineteenth-century successor was John Stuart Mill, whose 1844 Principles of Political Economy sought to update and systematize Wealth of Nations. Mill's most important successor as a field-defining political economist was Alfred Marshall.
