Satisfaction in Action: Hume's Endogenous Theory of Preferences and the Virtues of Commerce

Abstract

Hume’s theory of preferences would, from a contemporary point of view, be labelled an endogenous theory. He sees preferences largely as comparative desires that are formed and affected by the psychological process of sympathy. His view of preferences relates to his economic philosophy. Despite his understanding of preferences, Hume is, unlike some other thinkers with related perspectives like Thorstein Veblen, optimistic about the prospects of commercial society, claiming in one of his essays that the ages of commerce and refinement are both the happiest and the most virtuous. An important reason for his optimism lies in the fact that he understands happiness or well-being to largely consist in the process of actively pursuing one’s preferences, not necessarily in the state of having one’s preferences satisfied.

Keywords: David Hume; endogenous preferences; sympathy; economic philosophy; commercial society.

JEL Classification: B31, I31, P16