Adam Smith’s ‘Prudent Man’ of the Theory of Moral Sentiments and the ‘Frugal Man’ of the Wealth of Nations Are One and the Same Man: Economists Fail to Grasp That the Conduct of Smith’s Prudent Man and His Frugal Man Must Always by Necessity Come Before Any Actions by Smith’s ‘Benevolent’ Man

Abstract

It is simply impossible for benevolence to precede prudence because it is prudence that allows one to create a surplus that can be used later for benevolence. One can’t give what one does not have. Sympathy without the application of prudence first is simply a completely ineffective sentiment. Only prudence allows one to follow up sympathy with actions. One can imagine a poor Good Samaritan with no horse, no wine, no oil, and no bag of silver coins having sympathy for the badly beaten and robbed traveler on the very dangerous road to Jericho, but, because of his imprudent behavior in the past, not being able to act benevolently. The Good Samaritan would then go down in history as the Sympathetic Samaritan, who could take no actions of any importance to mitigate the sufferings of the beaten man. Economists have horribly misconstrued Smith’s story of the baker, brewer and butcher. The baker, brewer and butcher can’t possibly act benevolently in the future unless they can earn an economic profit in the present. It is absurd to expect the baker, brewer and butcher to practice benevolence if they are suffering losses or just breaking even. They have no surplus or bag of silver coins to give away to others. The baker, brewer and butcher must first practice prudence (self love) before they can help others. They must win the economic race first before they can even consider doing anything for others. Apparently, economists have badly confused altruism with benevolence. Altruism is not benevolence and it is not a virtue. The expectation that the baker, brewer and butcher should give away their products for free or at a greatly reduced cost to others is not benevolence. It is altruism. Altruism, except in highly unique and rare circumstances, is universally condemned by all spiritual leaders and guides precisely because it violates, for example, Christ’s second law that one must love your neighbor as you love yourself, which is prudence. Smith’s first book,The Theory of Moral Sentiments ,is his general theory of how humans should act. This general theory is based on the application of Five virtues. Prudence is ALWAYS the first virtue. Then temperance and courage, self command (self control) are practiced so that one is satisfied when his needs,not his wants, are met. Shrewdness, Frugality, Parsimony and Saving allow one to create a surplus by controlling one’s wants. The next virtue is the recognition of the importance of justice, followed finally, in last place, by benevolence. Smith’s second book, The Wealth of Nations, deals only with the economic race for an economic profit and the macroeconomic value of the sober (prudent) citizens, as opposed to the malevolent and detrimental behavior of the prodigals, imprudent risk takers, projectors, and British East India Company. ALL prudent citizens do their utmost to win this race in exactly the same manner that the runner in The Theory of Moral Sentiments does his very best to win the race in which he is taking part against others. There is no role for benevolence when one is preparing for, training, practicing, and then running the foot race. Similarly, there is no role for benevolence in an economic race. The Wealth of Nations deals with the economic race. Of course, AFTER both races have been won, one can practice self command, justice, and benevolence, but NOT BEFORE.