Erik Matson

This essay uses concepts from Adam Smith’s The Theory of Moral Sentiments to develop ideas about choice and welfare. I use those ideas to offer several challenges to common approaches to behavioral welfare economics and new paternalist policy making. Drawing on Smith’s dialectical concept of practical reason, which he develops in expositing ideas about self-awareness and self-judgment, I first argue that inconsistency need not be viewed as pathological. Inconsistent choices might indicate legitimate context-dependencies as individuals reflect over disjointed perspectives and act accordingly. Understanding inconsistency as reasonable raises epistemic difficulties for identifying errant choices and designing corrective policies. Second, I draw on Smith’s theory of the impartial spectator to discuss dynamic aspects of welfare. Welfare is not simply a matter of preference satisfaction but involves a sense of progress and improvement towards better preferences. Smith’s account suggests that economists interested in welfare should focus on institutional arrangements that facilitate self-development.

One of Hume's early biographers, John Hill Burton, described Hume's Political Discourses as "the cradle of political economy".1 "As much as that science has been investigated and expounded in later times," Burton argued, "these earliest, shortest, and simplest developments of its principles [in the Political Discourses] are still read with delight even by those who are masters of all the literature of this great subject."2 In their recent book, Margaret Schabas and Carl Wennerlind do much to vindicate Burton's claim, illustrating the genius, breadth, and lasting influence, across various schools of thought, of Hume's economics.Through a careful exposition of Hume's reflections on the methodology of...

This paper examines some connections between Hume’s epistemology in his Treatise of Human Nature and his political economy. I make three claims: First, I argue that it is the development of Hume’s account of the faculty of reason in Book I of the Treatise that leads him to emphasize social science—including political economy—and the humanities over more abstract modes of intellectual inquiry. Second, I argue that Hume’s conception of reason has implications for his methodology in political economy. His perception of human reason leads him to deploy a method of qualified generalization that emphasizes the by-and-large nature of theoretical statements. Third, when it comes to policy matters, the method of qualified generalization in theory cashes out in terms of practical maxims. I suggest that two central maxims in Hume’s political economy derive from his views of the usefulness of economic liberty and the coordinating nature of the status quo.

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.

ABSTRACTAdam Smith infused the expression ‘impartial spectator’ with a plexus of related meanings, one of which is a super-being, which bears parallels to monotheistic ideas of God. As for any genuine, identified, human spectator, he can be deemed impartial only presumptively. Such presumptive impartiality as regards the incident does not of itself carry extensive implications about his intelligence, nor about his being aligned with benevolence towards any larger whole. We may posit, however, a being who is impartial and who holds higher levels of intelligence and of benevolence, and then converse over what her sentiments would be about the matter under discussion. It is natural to conceive of a being who is unsurpassable in such qualities, who is morally supreme, and who naturally takes the definite article the without having been definitized by the writer. Signal passages, new to edition 6, suggest that Smith formulates the man within the breast as a representative of the always present and everywhere morally supreme impartial spectator. When Smith speaks of the man within the breast as ‘the supposed impartial spectator’, we interpret ‘supposed’ as sup-pos-ed, not sup-pos’d.