Unit 15 The First Modern Economists

The Basics of Adam Smith’s Works

In 1759, Adam Smith published his first work “The Theory of Moral Sentiments”. He continued making extensive revisions to the book up until his death. Although “The Wealth of Nations” is widely regarded as Smith's most influential work, it is believed that Smith himself considered “The Theory of Moral Sentiments” to be a superior work.

In the work, Smith critically examines the moral thinking of his time, and suggests that conscience arises from social relationships. His goal in writing the work was to explain the source of mankind's ability to form moral judgements, in spite of man's natural inclinations towards self-interest. Smith proposes a theory of sympathy, in which the act of observing others makes people aware of themselves and the morality of their own behavior.

Scholars have traditionally perceived a conflict between “The Theory of Moral Sentiments” and “The Wealth of Nations” - the former emphasizes sympathy for others, while the latter focuses on the role of self-interest. In recent years, however, some scholars have argued that no contradiction exists. They claim that in “The Theory of Moral Sentiments”, Adam Smith develops a theory of psychology in which individuals seek the approval of the "impartial spectator" because of their natural desire to have outside observers. Rather than viewing “The Wealth of Nations” and “The Theory of Moral Sentiments” as presenting incompatible views of human nature, some scholars regard these works as emphasizing different aspects of human nature that vary depending on the situation.

But these views ignore that Smith's visit to France (1764–1766) changed radically his former views and that “The Wealth of Nations” is an inhomogeneous convolute of his former lectures. Before his voyage to France in “The Theory of Moral Sentiments”, Adam Smith refers to an "invisible hand" which ensures that the gluttony of the rich helps the poor, as the stomachs of the rich are so limited that they have to spend their fortune on servants. After his visit to France, Smith considers in “the Wealth of Nations” (1776) the gluttony of the rich as unproductive labour. The micro-economic view in the traditions of Aristotle, Puffendorf and Hutcheson, Smith's teacher, – elements compatible with a neoclassical theory – changed to the macro-economic view of the classical theory that Adam Smith learned in France.

Notes:

theory of sympathy – теория сочувствия, сострадания

contradiction – противоречие, несоответствие

impartial spectator – беспристрастный наблюдатель

compatible – совместимый

gluttony – обжорство