Maria Pia Paganelli Receives Second Fulbright

Trinity University is excited to announce that economics professor Maria Pia Paganelli, Ph.D., has been granted her second Fulbright Scholarship. Paganelli will spend the Fall 2024 semester in Chile, the same location as her first Fulbright. There, she will investigate whether Adam Smith’s ideas on free banking have taken hold in Chile following the introduction of free banking laws in the country. 

Adam Smith is considered the father of economics, and as the president of the International Adam Smith Society, Paganelli is one of the leading experts on Smith worldwide. 2023 marked Smith’s 300th birthday, and to celebrate and discuss his legacy, Paganelli was invited to present at 19 universities and academic organizations and speak at six conferences across the world, some virtually but the majority in person. She spent her entire summer, spring break, Thanksgiving break, and part of winter break lecturing, and her travels took her to Japan, Chile, Scotland, Italy, China, Brazil, Colombia, and Canada, as well as the U.S. states of Pennsylvania, Massachusetts, and Virginia. 

To hear more about her past and upcoming international experiences, we asked Paganelli a few questions about her research and how it relates to her role as a Trinity professor. 

Tell us a bit more about Adam Smith and the topics you addressed in your lectures about his philosophies. 

As far as his economic ideas are concerned, Smith is famous for describing the generally positive effects of market interactions. Still, his analysis is quite nuanced. 

In my opinion, Smith cautions that we should condemn state interventions in the economy that are driven by special interest groups, which successfully capture state power to benefit themselves at the expense of the majority of the population. On the other hand, one should support interventions that benefit the entire population, as opposed to only a small part of it. 

What was your favorite experience from the many locations you visited?

My favorite event was actually not a lecture but a workshop I organized at the end of May in Santiago, Chile, with the help of some colleagues from Europe and North and South America. We brought together a group of twelve promising late Ph.D. students and early career scholars from Latin America to workshop their work on Smith. The goal was to help them prepare to present their work (in English) at international conferences and to help them make their work publishable. 

I believe this was an invaluable experience for them. For some of them, it was the first opportunity to present their work in English and to receive detailed comments from a group of renowned senior scholars. There is a lot of talent and interest in Smith outside North America and Europe. However, the resources to support excellence in teaching and research outside North America and Europe are not as abundant. Supporting early career scholars to break out of some external limitations and giving them the opportunities and tools to excel, I’d like to believe, was a good birthday present for Adam Smith. 

How do you feel your lecturing work aligns with your current research or teaching efforts?

In my experience, giving lectures to different audiences trains one to become a better teacher in the classroom. One needs to be able to address different skills, different backgrounds, and different levels of attention. And our classrooms are a microcosm of that diversity of the world.

Maria Pia Paganelli, Ph.D. (right), was invited to lecture by the Italian Parliament’s House of Representatives in their library in Rome, Italy, as part of her travels for the 300th birthday of Adam Smith.

Please remind us what you worked on for your first Fulbright, and how your second connects with or expands upon it. 

My first Fulbright was to study the transition from free banking to central banking in Chile and see if the thoughts of Adam Smith had any influence on that debate. Today, our money comes from a central bank—the Federal Reserve Bank in the U.S.’s case. Most countries in the world have a central bank that issues the country’s currency. But before the 20th century, private banks would issue money in many countries. This system, where there are multiple banks of issue, is called free banking. Adam Smith supported free banking, a system to which he attributed, in part, the economic growth and financial stability of the Scotland of his days.

After its independence from Spain, Chile developed a relatively well-functioning free banking system, but it eventually adopted a central bank. My original hypothesis was that Smith’s analysis would be used as a defense of free banking during the debate about the transition to a central bank. The work done during my first Fulbright proved me wrong. But what I learned at that time is that the free banking laws in Chile had a striking resemblance to the characteristics of free banking that Smith described as successful for Scotland.  The alleged author of the Chilean free banking laws was a French economics professor, invited by the Chilean government. The work of my first Fulbright culminated in my paper "A Smithian Reading of Chilean Free Banking" in the History of Political Economy (2023) 55 (4): 755–772.

My hypothesis now is that the resemblance of the Chilean free banking laws with the free banking system that Smith describes is not a coincidence. Thus, my second Fulbright will investigate if Smith’s ideas on free banking took hold in Chile with the introduction of free banking laws.   

What does it mean to you to receive not one, but two Fulbrights?

It is an incredible honor to receive a Fulbright, as well as a responsibility. Fulbrighters are considered cultural ambassadors, representing the U.S. and their home institutions in the host country. It is humbling to be picked to represent the culture of excellence that Trinity University fosters and creates. 

How does your Fulbright work align with your current teaching efforts?

Part of my work in Chile is to do research and part is to teach. 

My research on the possible influence of Smith on free banking in Chile will strengthen both my knowledge of Smith and my knowledge of money and banking. I will be able to transmit that knowledge to my students in my “Adam Smith’s Wealth of Nations” class, in my “Development of Economic Thought” class, and even in my “Principles of Macroeconomics” class. 

I also welcome the opportunity to teach a class on Adam Smith in Chile because I think teaching students who are different from my usual ones makes me a better teacher. The more diverse the students are, the more one needs to be flexible and able to address their different needs. In my experience, teaching in different countries allows me to see more ways to engage students and allow them to find ways to become passionate about what they are learning. 

Fulbright aims to develop long-term relationships between people and nations. I already have experience in designing a faculty-led study abroad course—the Iceland course, which I co-developed and co-teach with Diane Smith and Les Bleamaster. Who knows, maybe we can start thinking about developing another study abroad course in Chile?

Have you worked with any Trinity undergraduate researchers? Do you have plans to work with any for this project?

I have worked with Trinity undergraduate researchers in the past. One of my most successful researchers was Samuel Pappas ’24. He wanted to do an independent study with me to help me in my research. He provided such valuable help with the secondary literature that I formally thanked him in the paper. In this work, I show that Smith sees organized religion as any other special interest group, willing and able to capture state power. The paper was published last year (“Adam Smith and Religious Mercantilism” Research in the History of Economic Thought and Methodology. 2023. 41A: 27-35.) 

At the moment I do not have any plans of working with a Trinity student on the Fulbright project. But things can change, if there is a student who is interested in the history of free banking.

Please share any interesting or unusual findings from your work so far. What will the end result of your Fulbright look like? 

What I think is interesting is that thanks to being wrong in my original hypothesis, I was able to learn even more than I could have hoped for—and be awarded a second Fulbright. Mistakes are powerful learning tools!

The work of the first Fulbright led to the publication of an article in one of the leading history of economics journals (“A Smithian Reading of the Chilean Free Banking” History of Political Economy. 2023. 55.4: 775-772.) For my second Fulbright, my aim is to publish a follow-up article showing that the similarities between the Chilean free banking and the free banking that Smith describes are not an accident but the results of the implementation of Smith’s ideas in Chile.

How do you feel your Fulbright work aligns with Trinity's interdisciplinary liberal arts approach?

Exploring the possible use of Smith’s ideas in crafting the free banking laws of Chile is more of a technical work on Smith, but Smith is not only the father of economics. He was also a professor of moral philosophy, and he taught jurisprudence (law) and rhetoric. Among other things, he wrote on the history of astronomy, on ancient physics, on the external senses, and on the imitative arts. Smith’s vast library reflects his interest in all aspects of human knowledge. The consensus in the Smithian scholarship today is that to understand an aspect of his thought, one should try to analyze it as a part of the whole.

The entanglement of economics with political thought and philosophy or moral psychology is inevitable. Much of my past work looks at Smith’s analysis of the moral implications of market interactions, and a lot of my future work will look at markets as social milieus, where motivations play as much of a role as payoffs.

Any final thoughts?

I want to thank Trinity University for supporting my work and my efforts to be an ambassador of the strive for excellence that the University aims for its faculty and students.