This paper argues that economics, over the past 200 years, has become steadily more anti-philosophical and that there are three stages in the development of economic thought. Adam Smith intended economics to be a descriptive social science, rooted in an understanding of the moral and psychological processes of an individual’s decision-making and its connection to society in general. Yet, immediately after Smith’s death, economists made a clean cut and invented a totally new discipline: they switched towards a physicalist understanding of (...) human nature. Humans, like atoms, follow a natural law: they are driven by an emotion (defined as a non-emotion, rationality), namely selfishness. Thus economics became a ‘natural’ science. In the 20th century, the second reinterpretation removed all traces of humanity from the study of economics and declared economics to be a formal science like mathematics and logics. The actor in Phase 3 economics is homo economicus syntheticus, a postulate whose only connection to real humanity is the word homo. The paper asks what the results of this dramatic relocation are and why Phase 3 economics still claims descent from Smithian economics, despite the massive differences. (shrink)

In this thesis I argue that Adam Smith is committed to moral egalitarianism, which extends to his theory of political economy. While Smith’s work is often used to justify economic inequality in society, I show that his political theory is best understood as a kind of relational egalitarianism. Using Elizabeth Anderson’s Democratic Equality as a model, I examine Smith’s commitment to equality in the space of social relationships. In particular, I argue that Smith’s focus on eliminating inequalities that cause oppression (...) in society in conjunction with his efforts to design a political and economic system that will yield social conditions of freedom for individuals make him a relational egalitarian. (shrink)

Smith's famous invocation of the invisible hand -according to which self-interest promotes the greater good — has popularly been seen as a fundamental challenge to business ethics, a field committed to the opposite premise that the public interest cannot be advanced unless economic egoism is restrained by a more socially conscious mindset, one that takes into account the legitimate needs of stakeholders and the reciprocity inherent in networked relationships. Adam Smith has been brought into the discipline to show that his (...) authority cannot be summoned to fully support the free market sceptics of business ethics. Little has been done, however, to illustrate that Smith's moral writings actually contain the fundamentals of a business ethics teaching for managers who necessarily work within a variety of networks. This article analyses his moral thought to infer a Smithean framework of business ethics for managers. Smith believes that self-interest should be subordinated to moral imperatives, even in the business world. However, Smith rejects the principles of corporate social responsibility on the argument that benevolent impulses cannot be expected to prevail in the commercial arena. Instead of consciously trying to advance the social good, Smith's ideal manager will endeavour to personally live up to the standards enforced by an impartial spectator of his conduct, a theoretical entity reflecting the ethical requirements posed by the manager's social networks and stakeholder relationships. While this internalized onlooker expects a limited degree of benevolence, the overriding demand is for the manager to abide by the dictums of justice and prudence. (shrink)

As late twentieth-century discourses of modernity and postmodernity invoke their Enlightenment heritage in a search for the origins of their present achievements and predicaments, Adam Smith's works are still seen as a canonic representative of that heritage. Smith has long been evoked as the ‘father’ of economics and the original proponent of laissez-faire capitalism, but the political changes in recent decades have reconstituted his iconic status. With the full range of Smith's published and unpublished writings and lectures now widely available, (...) there has been a huge growth in the scholarly literature on Smith which has subjected this traditional view to searching questions. The overwhelming conclusion to emerge is that Smith's works display a subtlety and complexity that is at odds with the received image of Smith as the spokesman of modernity, but the diversity of interpretation raises some difficult methodological issues. (shrink)

: This study is an analysis of the theological and ethical dimensions inthe writings of Adam Smith. It deals with aspects of philosophy and intellectualhistory. By revealing the theological and ethical roots of Smith’s writings in theformation of modern economics, arguments for an economics that is based onIslamic foundations become stronger. The study will therefore lay out the basicmoral project of Smith and then contextualize it in the Western Enlightenmenttradition. It shows how religious discourses were instrumental in shaping thethoughts and (...) ideas of Enlightenment in general, and economics in particular.The study will then give a brief overview of traditional Islamic theology andethics in order to give directions for future research. (shrink)

This paper discusses Adam Smith's views of social justice. It first describes Smith's optimistic view of markets, for example with regard to the absence of negative externalities, which implies that he considered certain normative problems to be the exception rather than the rule. Then, Smith's views on redistribution are discussed: although he is sympathetic to progressive taxation, his main focus remains on free markets, which can partly be explained by his distrust of politicians. If one takes a closer look as (...) Smith's views of markets, however, it turns out that one of the reasons why he endorses them is their distributive features. He saw them as an antidote to the inequalities of the feudal age, offering all individuals an opportunity to work their way up to a decent standard of living and leading to more equality in the long run. Thus, Smith's account, while out-dated in certain ways, can serve as an inspiration for thinking about distributive justice not only as a question of redistributive taxation but also as a question of the institutional design of markets. (shrink)

Despite an initially warm reception, over the past two centuries assessments of the literary character of Adam Smith’s The Wealth of Nations have gradually but unmistakably turned negative. This transformation in the public reception of Smith’s text began during his lifetime and culminated in Heilbroner’s assertion that Smith wrote with ‘an encyclopedic mind, but not with the precision of an orderly one’. However, where Heilbroner and many of his predecessors saw obscurity and tedious attention to minor detail, recent scholarship has (...) begun to perceive remarkable literary subtlety and nuance. This article continues and builds upon that project. It commences with an assessment of three competing explanations of Smith’s literary style and settles on a philosophic and pedagogic explanation of The Wealth of Nations’ distinctive composition. In discerning a unique heuristic strategy and philosophic object in the text, the article places particular emphasis on Smith’s employment of syntactic complexity, stylistic juxtaposition and elliptical citation. The article concludes, somewhat ironically, with the observation that The Wealth of Nations itself succumbed to the maladies of the emerging commercial world-view, in classroom and market place, that its careful construction aimed to ameliorate. (shrink)

Motivation crowding out can lead to a reduction of ‘higher’ virtues, such as altruism or public spirit, in market contexts. This article discusses the role of virtue in the moral and economic theory of Adam Smith. It argues that because Smith’s account of commercial society is based on ‘lower’ virtue, ‘higher’ virtue has a precarious place in it; this phenomenon is structurally similar to motivation crowding out. The article analyzes and systematizes the ways in which Smith builds on ‘contrivances of (...) nature’ in order to solve the problems of limited self-command and limited knowledge. As recent research has shown, a clear separation of different social spheres can help to reduce the risk of motivation crowding out and preserve a place for ‘higher virtue’ in commercial society. The conclusion reflects on the performative power of economics, arguing that the one-sided focus on models of ‘economic man’ should be embedded in a larger context. (shrink)

In Capitalism and the Jews, Jerry Z. Muller attempts to resolve Milton Friedman's paradox: Why is it that Jewish intellectuals have been so hostile to capitalism even though capitalism has so greatly benefited the Jews? In one chapter Muller answers, in effect, that Jewish intellectuals have not been anticapitalist. Elsewhere, however, Muller implicitly explains the leftist tendencies of most intellectuals—Jewish and gentile—by unspooling the anticapitalist thread in the main lines of Western thought, culminating in Marx but by no means ending (...) with him. Thus, Milton Friedman saw a paradox where none existed. This may have been because Friedman was an economist, and economics is the one strand of Western thought that is, by and large, procapitalist. To an economist, opposition to capitalism may be paradoxical; to noneconomists, economics is alienating in its form and in its content. There is thus no mystery as to why intellectuals, including Jewish intellectuals, tend to shun economics and therefore gravitate to the left. (shrink)

A relatively small segment of business, known as social entrepreneurship (SE), is increasingly being acknowledged as an effective source of solutions for a variety of social problems. Because society tends to view "new" solutions as "the" solution, we are concerned that SE will soon be expected to provide answers to our most pressing social ills. In this paper we call into question the ability of SE, by itself, to provide solutions on a scope necessary to address large-scale social issues. SE (...) cannot reasonably be expected to solve social problems on a large scale for a variety of reasons. The first we label the orga nizational legitimacy argument. This argument leads to our second argument, the isomorphism argument. We also advance three other claims, the moral y political and structural arguments. After making our arguments, we explore ways in which SE, in concert with other social institutions, can effectively address social ills. We also present two examples of successful ventures in which SEs partnered with governments and other institutions. (shrink)

Isaiah Berlin distinguished between negative liberty, which is freedom from external coercion, and positive liberty, the freedom to master oneself. But the schema is too simple. Adam Smith thought that God had harmoniously arranged the world in such a way that the freedom provided by our negative liberty tended to redound to the public good. Mill, worried about the deleterious effects of public ignorance, accorded elites a prominent role in ensuring that negative liberty would lead to positive results. More recently, (...) libertarian paternalists, such as Richard Thaler and Cass Sunstein, have argued that research on biases and heuristics demonstrates the need for psychologically informed elites to direct negative liberty toward positive ends by crafting better ?choice contexts.? In these thinkers one can discern a third version of liberty, where negative liberty is not an end in itself but a means, however insufficient, to positive outcomes. (shrink)

In both the public and the business world, in academe as well as in practice, the ideas of Adam Smith are regarded as the bedrock of modern economics. When present economic conditions and management practices are criticised, Adam Smith is referred to by defenders and detractors of the current status quo alike. Smith, it is believed, defined the essential terms of reference of these debates, such as the rational pursuit of self-interest on part of the individual and the resultant optimal (...) allocation of goods in free markets thanks to the workings of an “invisible hand.” In this article, we question whether this standard view of Smith, the economist, is tenable. We provide an extensive review of the extant secondary literature from economists, business ethicists, and philosophers, comparing their assessments to crucial elements of Smith’s theoretical system. As a result, we show that Smith, far from being an advocate of a value-free or even value-averse conception of economic transactions, stood for a virtue-based and values-oriented model of business. Accordingly, we argue current management education and the pedagogy of business ethics ought to be changed, and certain strategic conclusions drawn for business practice. (shrink)

Given the growing interest in religion and spirituality in the community and workplace, we consider what light one of the oldest sources of human ethics, the Torah, can throw on the vexing issues of contemporary employment ethics and social sustainability. We specifically consider the Torah because it is the primary document of Judaism, the source of all the basic Biblical commandments, and a framework of ethics. A distinctive feature of Jewish ethics is its interpretive approach to moral philosophy: that is, (...) immersion and sense making in a dense, lived-in, complicated moral world, which is particularly useful with regard to ethical analyses of the workplace. Rather than discover or create a new ethic for the employer–employee relationship, we seek to harness general principles and norms from the Torah to contemporary business conditions. In the spirit of sustainability, rather than plunder the new, we recreate from existing resources. Interpretations from the Torah provide a rich source of moral and practical guidance for contemporary business ethics while also responding to academic and popular interest in spirituality and business. These tenets, however, have not to date been specifically directed at current predicaments in employment. We redress this by deriving principles from the Torah and applying them to ethical issues in contemporary employment practices. Practical guidance for both research in and practice of employment ethics is also provided. (shrink)