The Das Economist Problem from 1790-2016: The Failure of Economists to Understand Adam Smith's Ethical Foundation, Based on Virtue Ethics, for the Wealth of Nations
36 Pages Posted: 7 Dec 2016 Last revised: 9 Dec 2016
Date Written: December 7, 2016
The major impediment standing in the way for economists seeking to understand Adam Smith’s The Theory of Moral Sentiments (TTMS) and The Wealth of Nations (WN) is demonstrated to be their confusion over the terms, prudence, used by Smith in the standard Aristotelian sense in TTMS to mean putting one’s own welfare first before considering the welfare of others, and self interest, used in the WN to stand for the prudent behavior based on the virtue of prudence discussed in TTMS. However, given that prudence is one of Aristotle’s four virtues (Prudence, Justice, Temperance, Courage), it is impossible for the term self interest to stand for selfishness, avarice, greed, or egoist, hedonistic or utilitarian behavior or ethics in Smith’s work. It is this basic confusion between the meaning of these two words that accounts for the near universal misbelief among economists that Smith was a utilitarian in the WN, as opposed to being a practitioner of Virtue ethics in TTMS. This error of equivocation occurs because economists mix up Smith’s and Bentham’s views on the term self interest. It is a recipe for a confusion that is now well over 200 hundred years old.
Utilitarianism is concerned only with the ends, results, outcomes, goals, or consequences and nothing else. Virtue ethics considers outcomes also, but is also concerned with the roles of intentions, motives, means, duty, character, justice, fairness, equity, and intuition.
The Aristotle-Smith connection is practically the same as the connections linking Aristotle and Augustine and Aristotle and Aquinas in the work of Augustine and Aquinas. Economists simply have failed to see this obvious connection. There is no overlap between Utilitarianism and Virtue ethics.
Keywords: Aristotle, virtue ethics, prudence, self interest, beneficence, magnanimity, Bentham, utilitarianism
JEL Classification: B10, B12, B14, B22
Suggested Citation: Suggested Citation