William Dixon

_ Source: _Volume 5, Issue 2, pp 251 - 272 The old _Das Adam Smith Problem_ is no longer tenable. Few today believe that Smith postulates two contradictory principles of human action: one in the _Wealth of Nations_ and another in the _Theory of Moral Sentiments_. Nevertheless, an Adam Smith problem of sorts endures: there is still no widely agreed version of what it is that links these two texts, aside from their common author; no widely agreed version of how, if at all, Smith's postulation of self-interest as the organising principle of economic activity fits in with his wider moral-ethical concerns. We argue that the enduring Adam Smith problem may be solved by recourse to a realist perspective that recognises the different levels of social reality to which Smith refers in his discourse. Essential to Smith, we try to show, is the action-theoretic distinction between motive and capacity; between a typology of empirical human acts, on the one hand—self-love and benevolence in Smiths terminology—and the condition of possibility of all human action—what Smith calls the sympathetic principle—on the other.

A key issue in economic discourse today is the relation between economic behaviour and morality. Few would want to deny that human beings are in some sense moral or ethical creatures, but the devil is in the detail. Should we think of economic behaviour as an essentially amoral process – a process adequately characterised by a means-ends rationality – into which any number of subjective ethical concerns or orientations may be intruded to give a particular action its determinate moral content? Or is it rather the case that our moral being runs deeper than this, in the sense that all of our behaviour – ‘economic’ or otherwise – is enabled or capacitated by a competence that is fundamentally ethical in character? With new analyses of the work of Hobbes and Smith, Dixon and Wilson offer a fresh approach to the debate surrounding economics and morality with a novel discussion of the self in economic theory. This book calls for a change in the way that the relation between economic behaviour and morality is understood – from an understanding of morality as a kind of preference that informs certain types of other-regarding behaviour, to an idea of morality as a competence that enables or, rather, conditions the possibility of all forms of human behaviour, other-regarding or not. Offering a new insight on homo economicus, this book will be of great interest to all those interested in the history of economics and of economic thought.

There is a long and tortuous history of misinterpreting Smithian social theory. After rehearsing that history we offer here a way of understanding Smith that, unlike much of recent revisionist Smith scholarship, does not further add to this confusion. Our proposal is to understand the relation between moral and economic behaviour in Smith as analogous to the way in which Habermas makes strategic (and normatively oriented) behaviour parasitic on a more basic communicative competence. Given this analogy, it is ironic that Habermas's own understanding of Smith's theory also leaves much to be desired