Front Page Titles (by Subject) Adam Smith: Sympathy & Self-Interest - Literature of Liberty, Spring 1982, vol. 5, No. 1
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Adam Smith: Sympathy & Self-Interest - Leonard P. Liggio, Literature of Liberty, Spring 1982, vol. 5, No. 1 
Literature of Liberty: A Review of Contemporary Liberal Thought was published first by the Cato Institute (1978-1979) and later by the Institute for Humane Studies (1980-1982) under the editorial direction of Leonard P. Liggio.
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Adam Smith: Sympathy & Self-Interest
“Rethinking Das Adam Smith Problem.” Journal of British Studies 20 (Spring 1981): 106–123.
During the past decade, there has been a steady growth in scholarship concerning the moral and philosophical dimensions of Adam Smith's economic theory. Curiously, the literature has given only perfunctory treatment to das Adam Smith Problem—a phrase coined by a group of German scholars at the end of the nineteenth century. These German writers thought they saw a possibly fundamental contradiction between the assumptions of Smith's first work, The Theory of Moral Sentiments (1759) and those contained in his later book, the Wealth of Nations (1776). In the first treatise, Smith explained moral judgment on the basis of “sympathy,” the capacity of every person to “enter into” the situation of another and thereby bring his own “sentiment” into accord with those of his fellow. On the other hand, in the Wealth of Nations, Smith asserted that every individual was essentially self-interested.
Contrary to the relative neglect of the problem shown by modern scholars, Prof. Teichgraeber finds it crucial to an understanding of Smith's intentions as a moral and social theorist. The resolution of the contradiction inherent in das Adam Smith Problem may be found in a new understanding of the concepts of The Theory of Moral Sentiments. Three fundamental reinterpretations of the Theory help reconcile the notions of sympathy and self-interest.
First of all, the word “virtue” in the Theory has been traditionally linked to the humanist notion, that is, the pursuit of a single ideal that encompasses all the intentions and actions of the virtuous man. In the Theory, the notion of virtue as a comprehensive unity of ends was absent. Instead, virtue is discussed under the two headings of “humanity” and “self-command.” Smith's idea of moral personality was in fact a hybrid of Christian benevolence and classical stoical self-discipline. Successfully balancing the two to meet the contingencies of one's life was the essence of moral conduct.
Secondly, one cannot say that Smith simply abandoned the humanistic concern for virtue and later replaced it with a straightforward endorsement of economic self-interest. It was rather that Smith gave an account of virtue in the plural with a crucial distinction between ethics and justice. By and large, the Theory was an example of ethics, of personal moral rules. Smith's account of the types of personal virtue included at least one positive and fairly elaborate psychological account of how man's moral sentiments came into play in a society of individuals who were invited to be concerned primarily with their own self-interests. He argued that, in a “society of strangers,” sympathy translated concretely into the virtues of self-restraint and self-discipline because reliance on the sympathy of others would weaken one's moral fiber. If one accepts Smith's argument, where else would this ethic of self-command be more practicable than in a society fully based on self-interest?
Finally, the ascendancy of economic life in Smith's thought must also be explained in terms of a sharp limitation of the moral importance which traditional humanism had accorded to politics. Smith's accounts of justice and “public spirit” in the Theory devalue politics as a realm of human virtue. He found that the conduct of law-abiding, moderately public-spirited men was necessary to maintain a social order. But it did not represent a “real positive good.” Thus, in the Theory, individual morality was depoliticized and politics demoralized.
In the very same decade that Smith wrote the Theory, Rousseau complained that “The ancient politicians spoke incessantly of morals and virtue, ours speak only of commerce and money.” Rousseau was wrong, Prof. Teichgraeber feels, in at least one very important respect. The eighteenth century did in fact displace the broad ideals of classical and Christian humanism by the more narrow, yet practicable goals of economic growth. But an awareness of what the humanist tradition had asked of man did not suddenly die out. The humanist concern for virtue remained in Smith. It is the classical assumption that the term “virtue” can be used to describe an ideal of all-encompassing human excellence that has been abandoned. “This point,” Teichgraeber concludes, “is at the center of a ‘das Adam Smith Problem’ that should still perplex us.”