Achieving Social and Economic Equality by Unifying Business and Ethics: Adam Smith as the Cause of and Cure for the Separation Thesis

Abstract

AbstractAdam Smith's famous argument that self‐interested decisions will ultimately improve social welfare seems inconsistent with the social and economic inequality characterizing Smith's time and today. I contend that these inequalities are the result of Smith's failure to explicitly situate the economic man he describes in The Wealth of Nations within the broader social context he articulates in The Theory of the Moral Sentiments, an omission which has since given rise to the separation thesis, which states that business decisions have no moral content and moral decisions have no business content. In response to this modern‐day Adam Smith problem, I integrate Smith's notions of sympathy, intimacy, and justice into a unification thesis that articulates how individuals might balance their self‐interested and benevolent motives. By reuniting the discourses of business and ethics, this research may inform contemporary theories of business ethics and provide normative guidance for managers.