This paper reviews Aristotle’s problematic relationship with modern economic theory. It argues that in terms of value and income distribution theory, Aristotle should probably be seen as a precursor to neither classical nor neoclassical economic thought. Indeed, there are strong arguments to be made that Aristotle’s views are completely at odds with all modern economic theory, since, among other things, he was not necessarily concerned with flexible market prices, opposed the use of money to acquire more money, and did not (...) think that the unintended consequences of human activity were generally beneficial. The paper argues however, that this interpretation goes too far. The Benthamite neoclassical theory of choice can be seen as a dumbing down of Aristotle’s theory, applicable to animals, not humans. Adam Smith and Karl Marx were deeply influenced by Aristotle’s work and both started their main economic works with Aristotle: Smith ultimately rejecting, and Marx ultimately developing Aristotle’s views of the use of money to acquire more money. Possibilities for the future development of a new Aristotelian Economics are explored. (shrink)

Adam Smith’s Theory of Moral Sentiments has long been recognized as importantly influenced by, and in part responding to, David Hume’s earlier ethical theory. With regard to Smith’s account of the foundations of morals in particular, recent scholarly attention has focused on Smith’s differences with Hume over the question of sympathy. Whilst this is certainly important, disagreement over sympathy in fact represents only the starting point of Smith’s engagement with – and eventual attempted rejection of – Hume’s core moral theory. (...) We can see this by recognizing the TMS’s account of moral foundations as predicated upon a rejection of Hume’s distinction between the natural and artificial virtues. Smith is in turn revealed as generating a major break with Hume – a break which, if based on a superior theory of moral foundations has important consequences for how we treat Smith and Hume in both the history of philosophy and contemporary moral theory. (shrink)

This paper shows that Locke anticipates key features of Hume's more celebrated analysis of convention. It does so by developing Lenz's account of Lockean (linguistic) convention and its normativity, as presented in Socializing Minds. Locke's account of linguistic convention shares structural features also visible in Locke's treatment of the convention of money and property. The paper shows that Locke's ‘Humean' account of convention responds to a lacuna in Pufendorf’s treatment of linguistic convention that Lenz argues is significant to Locke.

We read Adam Smith's Theory of Moral Sentiments as a critical response to David Hume's moral theory. While both share a commitment to moral sentimentalism, they propose different ways of meeting its main challenge, that is, explaining how judgments informed by (partial) sentiments can nevertheless have a justified claim to general authority. This difference is particularly manifest in their respective accounts of ‘moral optics’, or the way they rely on the analogy between perceptual and moral judgments. According to Hume, making (...) perceptual and moral judgments requires focusing on frequently co-occurring impressions (perceptions of objects or reactive sentiments) for tracking an existing object with its perceptual properties or an agent's character traits. Smith uses visual perception for the purpose of illustrating one source of the partiality of the sentiments people feel in response to actions. Before making a moral judgment, people have to disregard this partiality and accept that they are all equally important. Smith and Hume's different ways of relying on the same analogy reveals the still-overlooked and yet profound differences between their moral theories. (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 this paper I propose that Adam Smith’s Theory of Moral Sentiments provides a solution to a well-known problem in contemporary ethical debate, i.e. the incompatibility between classic virtue ethics which is particularistic and informed by an ideal of virtue on the one hand, and modern principle-based ethics which attributes a prominent place to universal rules on the other. Smith acknowledges the incompatibility of these two paradigms. But, in order to preserve the advantages of both kinds of theories, he proposes (...) a third kind of moral theory: This theory can account for ancient-like virtues and judgments sensitive to the particularities of a specific context as well as for a limited set of universal rules, namely the ‘rules of justice’. The clue to this move is a change of the point of view from which moral judgments are assessed to what I call a ‘sympathetic-impartial perspective’. With this original approach Smith succeeds in articulating in a single and coherent theory the apparently irreconcilable elements of ancient and Modern accounts of morality. (shrink)

In this paper, we argue that Samuel Pufendorf's works on natural law contain a sentimentalist theory of morality that is Smithian in its moral psychology. Pufendorf's account of how ordinary people make moral judgements and come to act sociably is surprisingly similar to Smith's. Both thinkers maintain that the human desire for esteem, manifested by resentment and gratitude, informs people of the content of central moral norms and can motivate them to act accordingly. Finally, we suggest that given Pufendorf's theory (...) of socially imposed moral entities, he has all the resources for a sentimentalist theory of morality. (shrink)

In this paper I consider the context and significance of the first instalment of Hume's A Treatise of Human Nature , Books One and Two, on the understanding and on the passions, published in 1739 without Book Three. I argue that Books One and Two taken together should be read as addressing the question of the relation between reason and passion, and place Hume's discussion in the context of a large early modern philosophical literature on the topic. Hume's goal is (...) to show that the passions do not require government by reason, and to illustrate various ways in which the passions of social beings regulate themselves. The underlying theme of the first Treatise is thus a new theory of sociability: sympathetic sociability. (shrink)

Smith scholars have become interested of late in his thoughts on religion, and particularly the question of the degree to which Smith's understanding of religion was indebted to the influence of his close friend Hume. Until now this debate has largely focused on three elements of Smith's religious thought: his personal beliefs, his conception of natural religion, and his treatment of revealed religion. Yet largely unexplored has been one of the most important elements of Smith's thinking about religion: namely his (...) treatment of ‘the natural principles of religion’ in TMS 3.5. What follows aims to reconstruct this treatment and thereby shed light on what Smith might have meant by ‘the natural principles of religion’, and how he understood the relationship of religion and morality more generally – an understanding, it is argued, that significantly differs from Hume's, and reveals Smith to have been a critic of Hume's vision of the relationship of religion to morality, for all their agreements on other fronts. (shrink)

One of the more striking aspects of Adam Smith's moral theory is the degree to which it depends on and appeals to aesthetic norms. By considering what Smith says about judgments of propriety – the foundational type of judgment in his system – and by tying what he says in The Theory of Moral Sentiments to certain of his other writings, I argue that Smith ultimately defends an aesthetic morality. Among the challenges that any aesthetic morality faces is that it (...) seems to entail moral relativism. This problem is magnified by Smith's reliance on the judgments of the impartial spectator, which also seems to make his theory more vulnerable to a Euthyphro-type objection. I suggest that Smith can potentially get around these problems, given his presumption of aesthetic naturalism. While there is certainly some variation in our aesthetic judgments, Smith claims that we naturally find certain actions and sentiments odious, while others we find agreeable. The reason, he argues, is that any society that judged otherwise would not survive. (shrink)

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)

David Hume argues that reflections upon public utility explain the psychological foundations of justice and the moral feelings attendant on it. Adam Smith objects that Hume’s theory of justice is psychologically implausible. A just punishment attracts the approval of every citizen on Hume’s alleged view. Not every citizen can consider the abstract public interest every time, Smith observes, so Hume can’t have explained all of justice. I argue, in response, that Smith’s objection has not accounted for all of the causal (...) processes that Hume draws upon in support of reflections upon public utility. Conventions establish the very possibility of public interest, and socializing processes lend the public interest its moral salience. Human nature includes a species-general passion for acquiring property for the sake of family. The motivational centrality and universal scope of this passion, coupled with the dramatic psychological power of sympathy, generates the first moral feelings. Social conditioning develops those feelings into attitudes about reward and punishment. Hume’s theory of justice, with his conjectures about sociocultural processes, is both psychologically plausible and more complex than commentators tend to appreciate. (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)