Two Invisible Hands: Family, Markets, and the Adam Smith Problem

Abstract

Smith scholarship is split on whether the apparent conflict between self-interest in the Wealth of Nations (WN) and sympathy in the Theory of Moral Sentiments (TMS) indicates an intractable problem or is merely the result of a misunderstanding of Smith’s overall system. This chapter is written as a response both to the believers in das Adam Smith Problem and to those who offer a way of pulling the two texts together. In the first place, I argue that das Adam Smith Problem highlights the complexity of Smith’s body of work and his belief that the motives for behavior in the private sphere will be different from and sometimes conflict with the rules of the public sphere. Second, I argue that the higher-level economic order relies fundamentally on norms of behavior and rules of conduct that are nourished by the sympathy fostered in the lower-level orders of family and friends. At the same time, the economic order affects these lower orders, influencing in turn the norms of behavior and rules of conduct that support economic activity. Understanding how these different levels of order interact is central to understanding the often murky link between economics and morality. Such an understanding also begs for the rescue of the social sciences from the silos of separate political and economic analysis back to a Smithian ‘moral philosophy’ that takes into account human social behavior in its many forms.KeywordsCommercial SocietyInvisible HandMoral SentimentSpontaneous OrderImpartial SpectatorThese keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.