'Mises and Hayek admired Smith as a social theorist and system builder while rejecting much of his technical apparatus, especially the labor theory of value.'Kennedy responds,
'In "Adam Smith's System of Natural Liberty: Competition, Contestability and Market Process" Bradley characterizes Smith's system of "perfect liberty" as an ancestor of the Austrian model of the competitive market process, not the neoclassical model of perfect competition.'
'Given that ever one of Adam Smith's contemporaries, including John Locke before him, and his successors, Malthus and Ricardo, were far more firmly attached to the labour theory of value, particularly as an embodied value inside the product, I am astonished that they [the Austrians] pick on Adam Smith, whose commitment to labour as a measure of value was tenuous to put it at its strongest.'
'It is somewhat misleading to state: 'Smith's system of "perfect liberty" as an ancestor of the Austrian model of the competitive market process’. This is a fairly common association, though it is inaccurate. Some neoclassical economists refer to Natural Law theories as if they are identical with perfect competition. If Austrians are stopping short of that and confining the association to an 'ancestor' of a 'competitive market process', the problem remain.
Adam Smith was taught 'Natural Law' theories by Francis Hutcheson in the Scotch philosophical tradition passed on from Grotius, Pufendorf and Carmichael. This theory was not Adam Smith's; he taught Natural Law in the Scotch tradition; apparently 'Bradley' is either forgetful, or is not acquainted with the authors of the theory.
The theory was about jurisprudence, not competition in commercial society. In fact Natural Law rights applied, in theory, to any type of society and were independent of the form of government.'