Smith after Samuelson: Care and Harm in a Socially Entangled World

In “The Economic Machine and the Invisible Hand” (2009), Murray Milgate argues that the mechanistic thrust of twentieth-century economics owes more to Paul Samuelson than to Adam Smith inasmuch as Samuelson’s Economics “unambiguously associated the invisible hand with the efficiency of perfectly competitive equilibrium.” The textbook model of perfect competition, though analytically a special case, conveys an ideologically potent vision of economic life as atomistic, amoral, and exclusively market-based. This essay presents a prima facie case for two related claims: (1) the textbook view of Adam Smith’s economics ignores the analytic symmetries and complementarities between Smith’s Theory of Moral Sentiments (TMS) and Wealth of Nations (WN) and thus misrepresents the structure and implications of Smith’s moral philosophy, and (2) TMS and WN both theorize the behavioral, institutional, and ethical foundations for and enduring pathologies of extensive cooperation in commercial societies characterized by structural inequality, factionalism, elitism, ethnocentrism, and corruption.