Adam Smith Was Consistent in Both the Theory of Moral Sentiments and the Wealth of Nations on the Role of the Concept of Self Interest: Das Utilitarian Economist View Is the Problem
18 Pages Posted: 23 Apr 2018
Date Written: April 3, 2018
Adam Smith was very consistent in both the Wealth of Nations and in The Theory of Moral Sentiments concerning the role of self interest in both books. Like all advocates of virtue ethics, the first virtue to be mastered had to be the Virtue of Prudence, which required that the necessary condition of being able to take care of one’s self and family first, one’s self interest, had to be met first before any other virtue could be satisfactorily mastered and applied. Smith assumed that readers of the Wealth of Nations had previously read his The Theory of Moral Sentiments first, so that they understood that the butcher, brewer, and baker all had to succeed financially first before they could consider the interests of others second. Only after a clear and large surplus had been built up by the butcher, brewer, and baker from their small businesses would it be possible to meet the interests of others through benevolence. There is simply no contradiction or inconsistency between Smith’s position, made all through the The Theory of Moral Sentiments, that prudence is the most important virtue and that all other virtues come second or after prudence (self interest). Smith though it obvious that we get our dinner from the prudent behavior (own interest or self love) of the butcher, brewer, and baker and not from the virtue of Benevolence because Benevolence can only be practiced if the butcher, brewer, and baker has been successful in his business in amassing a surplus. The butcher, brewer, and baker can’t practice Benevolence if they are suffering losses or merely breaking even.
It is the Utilitarian economists of the 18th, 19th, 20th, and 21st centuries who created the myth that Smith had been inconsistent and/or had made contradictions in the two books, because these utilitarian economists rejected Virtue ethics and sought to place Bentham’s conflicting definition of self(ish) interests in place of Smith’s self interests in the Wealth of Nations. This was accomplished by the deliberate misinterpretation of the butcher, brewer, and baker quotation to support their claim that Smith had created an Invisible Hand of the Market force, to replace Hobbes’s government force, as the force that was the social institution that regulated the conflicting self(ish) interests of all citizens in the pursuit of the virtue of justice, so as to prevent the war of all against all. Utilitarian economists claimed that Smith’s Invisible Hand of the Market was a natural force, whose results were due to completely voluntary exchange actions, whereas government force was unnatural and involuntary. Smith’s mythical Invisible Hand of the Market became the natural reconciler of all conflicting self(ish) interests. Thus, there was really no need for government at all.
Keywords: Kennedy, Smith, Virtue ethics, Projectors, Imprudent risk takers, prodigals, Benthamite Utilitarianism, modern economics
JEL Classification: B10, B12, B14, B16, B20, B22
Suggested Citation: Suggested Citation