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Did Adam Smith think that moral values derived from the human capacity for sympathy could be compatible with economic relations based on self-interest?
The seeming incompatibility between the human capacity for sympathy, which is explored in the Theory of Moral Sentiments (TMS), and economic relations based on selfinterest, which form the premise of his second book An Inquiry into the Nature and Causes of the Wealth of Nations (WN), became a fiercely debated topic in Germany in the 19th century. This materialist critique (Umschwungstheorie) put forward 'Das Adam Smith
Problem'. It was the interpretation that the WN, where the basis of action is self-interest,
was a U-turn on TMS, where the basis of action is sympathy (Raphael and Macfie 20). The
Problem renders moral values stemming from sympathy and economic relations based on self-interests incompatible and irreconcilable. However, Smith himself had never thought of the two as incompatible, and upon clear reading of Smith's works, very few readers should see WN as a complete reversal instead of an extension of the principles of sociability laid out in TMS. Following Hutcheson, Hume, Pufendorf and the like, Smith places sympathy at the heart of sociability, which is expounded in TMS and expanded in the context of economic relations and governance in WN. This essay will argue that moral values stemming from sympathy and economic relations based on self-interests are compatible, because firstly,
sympathy is the direct basis for moral approbation instead of actions; secondly, the primary moral values or practices, namely justice and self-approbation, are self-interested in nature;
and thirdly, sympathy and these moral values encourage commercial relations by developing sociability; in that way, WN should be seen as a development of TMS.
Firstly, for Smith there is no conflict between sympathy and self-interest. The Adam
Smith Problem rests on the premise that the Smith who wrote TMS was a moral philosopher who believed the basis of human interactions and actions to be sympathy. They go on to
1 explain the apparent sudden change regarding the basis of human action in WN by an event that happened between 1759, when he first published TMS and 1776, when he published
WN—the visit to France, where he met Quesnay and other économistes (Phillipson 193).
Amongst the critics, Skarzinski argued that 'Smith was an Idealist, as long as he lived in
England under the influence of Hutcheson and Hume. After living in France for three years and coming into close touch with the Materialism that prevailed there, he returned to
England a Materialist.' (Oncken 445). The Adam Smith Problem, however, is a false one, and the impact of the visit to France has been overexaggerated. Firstly, the last edition of TMS
was published shortly before Smith's death, showing that he continued to see the linkage between TMS and WN (Raphael and Macfie 1). Secondly, Smith had always recognised the importance of self-interest in governing human beings' actions even in TMS. Smith sees selflove as natural, fit and proper. Although he recognises that some actions can be induced by beneficence, most actions are based on self-interest, and 'self-love may frequently be a virtuous motive of action' (Smith TMS 309). How Smith formulates the linkage between selflove and virtuous actions will be explored in the following paragraph. Nonetheless, these mentions of self-love show that Smith did not first come across the importance of selfinterest in guiding actions in Paris.
Instead of a basis for action, sympathy, for Smith, is more directly linked to moral approbation. Smith opens TMS with the proposition that 'how selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him' (Smith TMS 9). Heavily borrowing from Hume, whom he read during his Oxford years and went on to become close friends with, Smith based sympathy on imagination (Smith TMS 9). Through imagining the motive of someone's actions or the cause of someone's passion, humans form a judgement
2 about the propriety of someone's actions (Smith TMS 16). Though imagining the effect of someone's action by sympathising with the gratitude or resentment of the recipient,
humans form a judgement about the merits of the action (Smith TMS 18). The ability to judge other's actions does not immediately follow that we act beneficently. This is where
Smith departs from Hutcheson, his professor in Moral Philosophy during his time in the
University of Glasgow (Phillipson 42). Hutcheson believed that moral actions are motivated by disinterested feeling of benevolence, and the morally best action is one that produces the greatest happiness (utility) (Raphael and Macfie 12). Whereas Smith argued that benevolence is a virtue beyond moral rules created by sympathy. Acting benevolently and disinterestedly often requires enlightenment beyond how we are bound by moral rules to act (Smith TMS 87). What then governs our actions and how we conduct ourselves in economic relations if not beneficence? The most immediately moral values that govern our actions are justice and self-approbation, both of which stem from sympathy.
However, justice and self-approbation are ultimately self-interested, demonstrating that actions based on self-interest and sympathy are not mutually exclusive, and self-love can a virtuous motive of action. Smith called the rules of justice 'the rules of grammar; the rules of the other virtues' (Smith TMS 175). Smith based his discussion of justice on Hume,
who proposed the justice is an artificial virtue, sustained by what individuals' view of public utility and the importance of institutions (Hont 34). However, Smith locates the origin of justice in basic passions in individuals by defining justice as a virtue that when breached causes direct injury and resentment, and subjects the perpetrator to punishment (Smith
TMS 79). Justice is different from other moral values in that the force of sympathy with the resentment of the victim is greater than any other moral approbation (Smith TMS 80). In that sense, justice is a negative virtue because complying with it does not bring any reward,
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