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)

OVERVIEWWe ambitiously reexamine Smith’s moral theory in relation to Hume’s. We regard Smith's developments as glorious and important. We also see them as quite fully agreeable to Hume, as enhancement, not departure. But Smith represents matters otherwise! Why would Smith overstate disagreement with his best friend?One aspect of Smith’s enhancement, an aspect he makes very conspicuous, is that between moral approval and beneficialness there is another phase, namely, the moral judge's sense of propriety. With that phase now finding formulation, Smith, (...) if only implicitly, generates a spiral of beneficialness and propriety, a spiral shown in Figure 7 in the present paper. We consider Figure 7, illustrating the spiral, to be the most important arrival point in the present paper; it highlights the non-foundationalism of Smith's ethics. But to arrive at the spiral, we must engage in extensive exegesis.In Part IV of The Theory of Moral Sentiments, Smith presents a foil against which he develops his own theory, a foil supposedly representing Hume. According to the foil, moral approval derives from ‘utility.’ But, in multiple ways, the foil is misleading. We provide an interpretation of Hume, notably his four-factor account of moral approval, before examining Smith's representation of Hume.One twist is that Smith used the words utility and useful differently than Hume did – Smith quietly stretched them to include species of agreeableness, thereby obscuring the importance of agreeableness in Hume’s theory.Another, more significant problem is that Smith allows the impression that in Hume moral approval derives quite determinately from beneficialness. In fact Hume conveys the interpretive and sentimental spaciousness of the operations that generate moral approval; here, Hume even speaks repeatedly of ‘proper sentiments’, thus almost using the term propriety himself.But the propriety phase in Smith opens up to a key facet of Smith’s development on Hume: He poeticizes a locus of sympathy not emphasized in Hume – namely, that between the moral judge and her own man within the breast; that locus enters the theory in addition to the sympathies emphasized in Hume, not in lieu of them. We distinguish lateral sympathy, which is important in Hume’s thought, and vertical sympathy, which is especially characteristic of Smith’s more inner-directed and allegorical thought. Smith embraces Hume’s lateral sympathy and enhances moral theory by adding formulations that elaborate vertical sympathy.Next, we come to something of a twist in the whole matter: We show that – as Smith well knew all along! – propriety is a species of agreeableness! Smith’s propriety phase represents another dimension within which such agreeableness lives: Smith’s vertical dimension thus gives rise to a spiral representing the diachronic development of the judge herself. It is a spiral of beneficialness and propriety: Each propriety phase in the next loop of the spiral engenders a species of agreeableness now as a part of beneficialness.Smith's developments on Hume, then, involve the following three facets: formulation of the propriety phase; the poetic elaboration of vertical sympathy; the diachronic spiral of propriety and beneficialness.The three facets come together, especially in Ed. 6 of The Theory of Moral Sentiments. The whole development goes beyond Hume, but, really, is agreeable to Hume – though Smith himself portrays his developments as disagreeing with features of Hume's moral theory.We speculate that Smith was more or less aware of all that that we say, including the absense of any really substantive disagreement. Why, in that case, would Smith have proceeded as he did? We address that question at the end of the piece. Our speculations suggest a method in the madness. (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)

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 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)

We share our world with many people who ignore the principles of justice and who regularly take advantage of others by breaching trust or breaking agreements. This dissertation is about the irrationality of the actions of these covenant-breakers. A covenant-breaker typically believes that unjust behavior is to his advantage and that only a fool would act in any other way. Would it not be disturbing if this were true? My central claim will be that adherence to the precepts of justice (...) is a rational strategy for a self-interested actor. I intend to demonstrate that con men and covenant-breakers do not act rationally when violating an agreement. I will trace the concept of justice as it evolves through philosophical history and show that, while the concept of justice changes as the underlying concept of human nature and psychology changes, the argument in favor of the rationality of just behavior remains coherent throughout. Each historical interpretation will advance some form of the claim that the consistent observance of cooperative agreements is a rational strategy, and at each point an interlocutor will object. I will show that these interlocutors are mistaken. My motivating goal is to show that justice, understood as the consistent observance of cooperative agreements, is rational. I want to respond to the clandestine cheaters and other skeptics who believe that just behavior is for suckers, because, if the skeptics are right, and justice is indeed irrational, then those among us who are acting in a just manner are paying an unnecessary cost. (shrink)