Adam Smith: How The Theory of Moral Sentiments
provides new insights into the intellectual project of the
‘Father of Economics’
!Professor Matthew Watson, Dr Simon Glaze and Dr Chris Clarke, Department of Politics
and International Studies
!
Published March 2015
The Wealth of Nations, written by Adam Smith and published in 1776, is one of the
most immediately recognisable titles in the history of economic thought. Even people
who have little specialist knowledge of the subject field can tell you that this is where
it began and that this is where economists first started to explore the outer limits of
market life. However, Matthew Watson, Simon Glaze and Chris Clarke explain why
there is more to that book than often meets the eye. In particular, they suggest that
ostensibly hidden layers of meaning can be uncovered by reading it through the lens
created by Smith’s earlier published work, The Theory of Moral Sentiments.
As we go about our day-to-day business we are surrounded by ideas associated with
Adam Smith. Most people will be at least peripherally aware of this, be it through his face
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ADAM SMITH: HOW THE THEORY OF MORAL SENTIMENTS PROVIDES !
NEW INSIGHTS INTO THE INTELLECTUAL PROJECT OF THE ‘FATHER OF ECONOMICS’
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on the back of the £20 note, as the man behind the central market concept of ‘the invisible
hand’ or through the principle of the division of labour which he used to explain the
developments of the Industrial Revolution. But have you ever had the inkling that there is
more depth to Smith than this merely peripheral awareness can convey? Three scholars
from the Department of Politics and International Studies (PAIS) at the University of
Warwick – Professor Matthew Watson, Dr Simon Glaze and Dr Chris Clarke – certainly think
there is. Their work shows what more can be discovered when setting out to identify the
man behind the myth. They argue that Smith offered much more than a set of handy
catchphrases to justify the expansion of the market and retrenchment of the state. He had a
moral project which ran much more deeply than this, positioning him somewhat awkwardly
at the boundary between optimism and caution as to the future of the human race. Those
who want to see beyond the opportunely pinched snippets of Smith’s great works to do
justice to their full richness should read on.
!
In popular knowledge, Smith has come to be seen as the main proponent of the
unrestrained spread of the ‘free market’, ‘free trade’ and the exploitation of commercial
opportunities reflecting the profit motive alone. But how did Smith, the moral philosopher
with a deep suspicion of the way in which the business elite used eighteenth-century
governmental structures for their own self-preferment, come to be interpreted in this way?
Matthew suggests that each generation of political actors has had their pick of Smith’s work
in an attempt to use it to further their own political ends. “There is always a danger that the
real secrets of his texts remain unexplored as they become ever more deeply buried under
subsequent layers of
interpretation. Just look at
how many times you get
told ‘what Adam Smith
really meant’ by people
whose views bear no real
relation to what you find
when you open up his
books and start reading for
yourself”. He specifically
remembers the dominant
‘Smithian voice’ of the
1980s, propelled in the UK
by the Adam Smith Institute
d u r i n g t h e ro l l - o u t o f
Margaret Thatcher’s free
market reforms and in the
US by lobbyists wearing Adam Smith neckties who stalked the corridors of power in
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ADAM SMITH: HOW THE THEORY OF MORAL SENTIMENTS PROVIDES !
NEW INSIGHTS INTO THE INTELLECTUAL PROJECT OF THE ‘FATHER OF ECONOMICS’
2
Washington making claims against ‘Big Government’. In each case the authority of Smith’s
name was sought to give weight to changes which would have been made for
straightforwardly ideological purposes in any case. The populist market-promoting
meaning that Smith’s work has come to acquire today has resulted especially from the
appropriation of his ideas by right-wing politicians during the last 30 years in order to drive
market rationalities ever deeper into society.
!
Letting the Market Rip or Finding a Means for Moral SelfTutoring?
!
Matthew reminds us that the culling of “one or two colourful phrases” from a nearly 1,000page work is never going to lead to a representative account of the subtlety of the analysis
as a whole. Smith’s deeply detailed works are full of qualifications, leading to the endless
search for institutional solutions consistent with people having done the right thing. Yet,
says Matthew, “they are so often stripped down by contemporary politicians to equate
simply to the deregulation of markets and to allowing people to do whatever their selfinterest dictates within the resulting market environment”. Promoting the ‘invisible hand’
metaphor to the controlling voice in the whole text of the Wealth of Nations symbolises this
seemingly indiscriminate selectivity. In truth, it appears only the once in what, by any
standards, is a mammoth undertaking. But that seems to matter less to the people who
appeal to it today than the political work that it can be made to do in justifying any
remotely neoliberal reform that restricts the scope of government intervention. The task of
engaging Smith’s work without being unduly distracted by these modern interpretations of
what he really said is by no means easy. An open mind and a pair of fresh eyes are needed
to break through the fog.
!
To understand Smith more sensitively,
An open mind and a pair of fresh eyes
first of all we must recognise that he
wrote not one but two seminal works. are needed to break through the fog"!
The Theory of Moral Sentiments was
written in 1759, 17 years before the
Wealth of Nations, and it provides a much more reliable guide to his economic
masterpiece than the claims of today’s economic lobbyists. Chris speaks up very strongly in
favour of reading the two books side-byside in order to get a glimpse of how
S m i t h fl e s h e d o u t h i s “ b r o a d e r
Smith’s first book tells you just as much
philosophical project”. It is in this way
about his views on life in commercial that we might adequately understand his
society as the second, if not more”!
views on the human condition. “They’re
often viewed as unrelated to each other”,
"
"
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ADAM SMITH: HOW THE THEORY OF MORAL SENTIMENTS PROVIDES !
NEW INSIGHTS INTO THE INTELLECTUAL PROJECT OF THE ‘FATHER OF ECONOMICS’
3
explains Chris, “but Smith’s first book tells you just as much about his views on life in
commercial society as the second, if not more”. Everything that he later said about the
scope of markets – when they should be tolerated, when not; what forms they should be
allowed to take, what not – flows from his prior construction of the moral limits of human
action.
!
Chris explains how Smith lived in a pre-disciplinary era, well before the stratification of the
social sciences into their disparate modern-day forms. “Smith had free rein on the subject
matter he could mobilise in the construction of his arguments”, Chris suggests, “and they
were all the better for it”. He
read and lectured extensively
on a broad range of topics from
the origins of language, the
nature of scientific explanation,
the history of legal systems,
moral and political philosophy
to the economics of his day. His
interests even stretched as far
as astronomy. This scope of
knowledge, difficult to attain in
t o d a y ’s d i s c i p l i n e - f o c u s e d
academic environment, meant
that Smith’s view about human
b e h a v i o u r re fl e c t e d m a n y
different approaches and was therefore far from straightforward. Yet the picture of Smith
painted by mainstream economists today is as the advocate of a type of human behaviour
guided by simple and universally applicable market rationality. When we take a detailed
look at Smith’s writing we discover that he actually saw humans as individuals permanently
coming into being as they relate to the social norms in which they find themselves, not as
fully formed and robotically spontaneous merchants of self-interest. “Smith was actually
very sceptical of those who espoused ‘the interest doctrine’ at his time of writing”, Chris
says, “and wanted instead to base his approach to the complex issues of morality and
behaviour on his concept of ‘sympathy’”. In a sense, he was inherently hopeful of what
humanity could become. His philosophical work was grounded accordingly and with a
strong conviction in the human ability to exercise self-command. Smith’s notion of
individual self-command implies that every one of us is capable of self-learning and selftutoring so that we may best navigate the moral dilemmas that we will always face as long
as market society persists. The agency he gave to everyone demonstrated that, at least for
his day, Smith had a subtle radicalism that he wanted to write into his work.
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ADAM SMITH: HOW THE THEORY OF MORAL SENTIMENTS PROVIDES !
NEW INSIGHTS INTO THE INTELLECTUAL PROJECT OF THE ‘FATHER OF ECONOMICS’
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Smith on Self-Command and Sympathy
!
Simon clarifies that self-command, far from meaning the ruthless pursuit of self-interest in
the way that pro-market lobbyists suggest, could mean any conscious decision to act more
thoughtfully to restrict your
conduct to that which does
other people no harm. As he
notes, “this can be related to
Smith’s flexible notion of
virtue, which suggests that
individuals can be satisfied
that they are acting in as
virtuous a manner as they are
able to given particular
circumstances, which others
may be unaware of”. Smith did
not think that all self-conscious
action had to be self-interested, nor yet that all self-interest had to be necessarily selfish.
These equations seem to be a reading that has developed long after Smith’s time. After all,
in the modern day context how could we
perceive the pursuit of self-interest to
Smith did not think that all selfever be anything but ruthlessly
individualistic?
conscious action had to be self-interested,
"
!
nor yet that all self-interest had to be
necessarily selfish"!
Smith’s philosophical work reveals that
he believed in the human possibility of
‘sympathetic self-interest’. Simon sheds
light on the multiple references that Smith made to situations in which self-interest could
rationally be forgone in order to prioritise the common good. In the modern context, such
examples could be choosing to pay slightly extra for a more ethically produced good,
taking public transport instead of driving or making sure that you did not take advantage
of tax avoidance schemes. So, by considering Smith’s broader philosophical project we
begin to demystify the populist pro-market readings of Smith that have emerged over the
last 30 years. That project preceded the writing of the Wealth of Nations, and in many ways
it should also be seen as coming after it too. At the very least, it was the Theory of Moral
Sentiments that Smith continued to update late in his life, whilst the text of the Wealth of
Nations was edited far less extensively. Consequently, as Simon says, “there is no ‘Adam
Smith Problem’, which suggests that there is a fundamental schism between his earlier and
later work. Although the Problem has long been discredited in specialist debates, its notion
of two incompatible moral and economic ‘Smiths’ that are imagined to reside exclusively
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ADAM SMITH: HOW THE THEORY OF MORAL SENTIMENTS PROVIDES !
NEW INSIGHTS INTO THE INTELLECTUAL PROJECT OF THE ‘FATHER OF ECONOMICS’
5
within the pages of either book continues to inform popular understandings of his
contribution. Yet Smith clearly did not leave his moral philosophy behind when writing the
Wealth of Nations.” !
Whilst Smith’s work is notable for his hopefulness, he was not without his reservations
about the potential corruptibility of human nature. Matthew highlights this double
dimension to Smith's work: on the one hand aspirational and optimistic about what was
possible, but on the other hand giving warnings about what could result if society was to
choose a morally questionable path. “The fact that the practices of moral self-learning
might lead to the development of pristine individuals instinctively exhibiting self-command
does not mean that they always will do, because there is always the danger that the
trappings of a material lifestyle could get instituted as a distorted moral ‘good’ in their own
right.” Matthew draws our attention in particular to various passages in the Wealth of
Nations where “Smith clearly felt that his whole enlightenment project could fall foul of
disreputable individual behaviour”. It was at this point that Smith’s usual polite writing style
was replaced by a “distinct spikiness aimed at those who would use governmental
structures to deliberately favour themselves, whereby in effect both barrels of the shotgun
were loaded and fired”.
!
The Broader Significance Today
!
But having said all this, why bother trying to demystify Smith in the first place? Is it just a
matter of getting some academic bragging rights? All three of our PAIS scholars think not.
They claim that all layers of modern-day society, from the powers-that-be in the
Westminster Village to the local bus driver can and need to learn from Smith’s messages.
What we see on one side of Smith’s work is optimism that individuals can prepare
themselves for a life in market society without needing to give up on the idea of becoming
a respectable moral agent. But we also see on the other side of Smith’s work a deep
concern about the potential hazards of commodification as they impact on the lives of the
individuals who comprise market society.
!
"
....individuals can prepare themselves for
Simon describes Smith as a non-elitist,
low key, man-of-the-people who was a life in market society without needing to
opposed to top-down relations of all give up on the idea of becoming a
forms, be that on behalf of government respectable moral agent”!
or private enterprise. “In both of his
books Smith openly criticises what he
perceives to be the ‘arrogance’ of ‘crafty’ politicians who attempt to project their moral
standpoints onto others whilst protecting vested interests”, Simon says. “It is therefore
ironic that he continues to be invoked by politicians who seek to add intellectual weight to
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ADAM SMITH: HOW THE THEORY OF MORAL SENTIMENTS PROVIDES !
NEW INSIGHTS INTO THE INTELLECTUAL PROJECT OF THE ‘FATHER OF ECONOMICS’
6
their own efforts to foster specific forms of behaviour through interventions into
individuals’ lives on moral grounds whilst rejecting state interventions into the market on
ideological ones”. The pristine Smithian moral agent therefore might be seen as a
democratising agent envisioned long before the coming of mass democracy. This should
give us all pause for thought about our potential culpability in top-down violations of the
modern-day market society. Whether this is manifested in the hyper-consumerist
tendencies we manifest at the expense of developing world producers, the exploitative
zero hour labour contracts we impose on our own workers, the oligopolistic supermarket
industries that crowd out local producers, the toxic financial products that we direct at the
vulnerable, or whatever it is, the list goes on almost endlessly. All three of our PAIS scholars
say that it is especially important for those who misappropriate Smith’s message in order to
condone market violations to remember
that what today we experience as market
...the one-dimensional markets we have
society is by no means a natural state of
affairs. Markets may be made to take today display a lack of political
many forms, and the one-dimensional imagination in the way that they are set
markets we have today display a lack of up routinely to promote a distinctly unpolitical imagination in the way that they Smithian individual self-interest"!
are set up routinely to promote a
distinctly un-Smithian individual selfinterest.
"
!
Smith’s ideas of moral self-tutoring and moral self-learning, by contrast, gave a radical
degree of agency to every person to
make their own decisions about whether
we are the authors of our own society"!
to affirm the general direction of market
society. His message was that each and
every one of us has not only the potential
but also possibly the duty, in Matthew’s words, to “understand ourselves in relation to these
broad economic structures”. “Importantly,” he continues, “that understanding is not as
"
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ADAM SMITH: HOW THE THEORY OF MORAL SENTIMENTS PROVIDES !
NEW INSIGHTS INTO THE INTELLECTUAL PROJECT OF THE ‘FATHER OF ECONOMICS’
7
victim of faceless economic forces but as an active agent of the structures within which we
find ourselves. Embracing Smith’s optimism in human nature allows us to explore the
boundaries of our personal complicity in reproducing economic structures that do harm to
other people.” The realisations that come with this open-eyed interaction with the world
will lead us all to an important truth: that is, that “we are the authors of our own society”.
The responsibility that comes attached to such a message should be apparent to us all.
!
Matthew Watson is Professor of Political Economy at Warwick
and currently holds a three-year ESRC Professorial
Fellowship. His research interests lie with political economy,
‘the market’ and understanding what it means to live life as a
market-bound economic agent. His research is designed to
understand the multiple ways in which the market economy
becomes embedded in everyday experience: as a set of
institutions designed to naturalise behaviour, as an
ideological blueprint for the common sense of society, as
formal practices manifesting routinely reproduced exchange
relations, as evolving ideas incorporated into the history of
economic thought, as reflections in popular culture, and as something to organise political
resistance against.
http://
www2.war
wick.ac.uk/
fac/soc/
!
http://
www2.war
wick.ac.uk/
fac/soc/
book series later in 2015.
Chris Clarke is Assistant Professor in Political Economy at
Warwick. His research interests are in the politics of financial
markets, the ethics of Anglo-American economic citizenship,
the history of economic ideas, particularly the work of Adam
Smith, and the political economy of peer-to-peer (P2P)
lending. He has been awarded a three-year Leverhulme Early
Career Fellowship to pursue work specifically on the topic of
P2P lending in the UK. His monograph Sympathetic Political
Economy and Liberal Market Governance: Adam Smith in
Question, Global Finance in Crisis
will appear in the Routledge/RIPE
!
Simon Glaze is a Teaching Fellow in International Political
Economy. His research interests centre upon academic and
political articulations of individual economic rationality. He has
recently published an article on Smith’s relevance to
contemporary international political economy in New Political
!
https://
www2.war
wick.ac.uk/
fac/soc/
!
ADAM SMITH: HOW THE THEORY OF MORAL SENTIMENTS PROVIDES !
NEW INSIGHTS INTO THE INTELLECTUAL PROJECT OF THE ‘FATHER OF ECONOMICS’
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Economy, and is currently writing a book on what uses of Smith by leading politicians and
academics can tell us about their assumptions regarding individuals’ motivations and the
ongoing development of liberal capitalism since his lifetime.
!
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ADAM SMITH: HOW THE THEORY OF MORAL SENTIMENTS PROVIDES !
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