Smith and the problem of profit

Abstract

In this article we will investigate what for Adam Smith is the reason or cause why the “capital” factor of production should be remunerated with profit. We will detail what we will call “the problem of profit” that arises from the vagueness with which the phenomenon of profit is explained within the work. We will begin by showing the difficulties that come with the usual interpretations made on this issue, that is, the solution “via parsimony” and “via power”, we will see both of them as attempts that fail to provide an adequate answer, in the first case it will not directly answer to the problem, while the second solution reaches a conclusion that is a contradiction within Smith's philosophy. Then, we will present our own answer and show in what sense it manages to overcome the aforementioned difficulties: profit as a reward for trade that makes the division of labor possible.