Adam Smith (‘Self Interest’ Meant the Virtue of Prudence) Against Jeremy Bentham and the Economics Profession (‘Self Interest’ Meant the Vice of Greed, Selfishness, and Avarice)
30 Pages Posted: 11 Dec 2017
Date Written: December 7, 2017
The economics profession has completely mixed up Adam Smith’s definition of self-interest, by which Smith means the absolute necessity of successfully applying the Virtue of Prudence, with Jeremy Bentham’s directly conflicting definition of self-interest, which is the Vice of Greed, Selfishness, and Avarice a la Scrooge in Charles Dickens’s Christmas tale. There is a direct contradiction between Smith and Bentham. It is impossible to create a synthesis of the two. This inherent contradiction has been buried deeply into the field of microeconomics since the deaths of Benjamin Franklin and Adam Smith in 1790 resulted in Bentham’s directly conflicting concept of Maximizing Utility, as presented in his Introduction to the Principles of Morals and Legislation, to dominate the economics profession through the influence of Bentham’s students, J B Say, David Ricardo, James Mills, John Stuart Mills, and Nassua Senior. Smith’s theoretical world of a profit maximizing, purely competitive economy is populated with a huge number of “sober” individuals, all seeking to apply the virtue of prudence. They are circumspect, hardworking, dedicated, motivated, frugal, parsimonious, careful, cautious, and disciplined. Their goal, in order to make their small business a success over time so as to care for themselves, their families and relatives ‘is financial success. Of course, Prudence is the necessary condition that must be satisfied first before any of the other virtues can be attempted, practiced, or implemented. Maximizing the profits from their small business operations represents Prudent behavior.
Bentham’s world is one that is populated by greedy, selfish, avaricious prodigals, imprudent risk takers, and projectors. They can be represented by the behavior of the British East India Company, John Law, Cantillon, etc. Bentham and all of his students either worked for, or were consultants and advocates of, the policies of the British East India Company that Smith so heavily criticized in The Wealth of Nations. Bentham’s Maximizing Utility dictum is a good representation of how Max U thinking was implemented by the British East India Company in its attempt to dominate the American colonies in the period from 1760 to the start of the American Revolutionary War in 1776, the attempted subjugation of the USA in the War of 1812, as well as there being the main instigator in the “Napoleonic” Wars from 1795-1815 with France.
The economics profession has totally mixed up diametrically opposing concepts, Smith’s prudent and judicious goal of maximizing profits, with Bentham’s Scrooge-like goal to maximize only his utility. Given these direct conflicts, it is clear that the real founder of the economics profession is Jeremy Bentham and not Adam Smith. Of course, given that practically all philosophers consider Benthamite Utilitarianism to be a failure, it is understandable and not surprising that the economics profession would seek to try to claim that Adam Smith was the founder of economics while, in reality, building economics on a principle, Max U, that was totally alien to Smith’s philosophy and economics.
Keywords: Smith, Virtue Ethics, Uncertainty, Indeterminate Probability, Imprecise Probability, Benthamite Utilitarianism
JEL Classification: B10, B12, B14, B16, B20, B22
Suggested Citation: Suggested Citation