Dissolving the Chimera of the ‘Adam Smith Problem’
AbstractIn The Wealth of Nations, Adam Smith set out his influential theory that societies achieve prosperity by securing the freedom of individuals to pursue their own end by the means they choose within a framework of rules of justice. In his earlier work The Theory of Moral Sentiments, Smith developed his thesis about the origins of our moral sentiments and the emergence of rules of justice. The socalled ‘Adam Smith Problem’ concerns the perceived inconsistency between Smith’s defence of selfinterest in the Wealth of Nations and his emphasis of sympathy as the origin of moral sentiments in the earlier work. The existence of the ‘Adam Smith Problem’ has been contested by many writers. The present author provides a number of new arguments to demonstrate the illusory nature of the problem by revisiting the key elements Smith’s moral theory. The author argues that the problem dissolves when the role of justice in providing the conditions of free trade is understood. Smith’s tirade against wealth worship is explained as part of his defence of justice and not a condemnation of wealth accumulation. According to this reading, the Theory of Moral Sentiments is a powerful statement of the moral basis of capitalism.
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Bibliographic InfoPaper provided by ICER - International Centre for Economic Research in its series ICER Working Papers with number 05-2010.
Length: 21 pages
Date of creation: Mar 2010
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-06-11 (All new papers)
- NEP-HIS-2010-06-11 (Business, Economic & Financial History)
- NEP-HPE-2010-06-11 (History & Philosophy of Economics)
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