Front Page Titles (by Subject) Justice and Adam Smith - Literature of Liberty, April/June 1978, vol. 1, No. 2
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Justice and Adam Smith - Leonard P. Liggio, Literature of Liberty, April/June 1978, vol. 1, No. 2 
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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Justice and Adam Smith
“Justice in Smith: The Right and the Good.” Review of Social Economy 34 (December 1976): 275–294.
Adam Smith exposits a complex view of justice (in The Wealth of Nations and The Theory of Moral Sentiments), which supports liberalism on nonutilitarian grounds. This view corrects John Rawls's characterization of Smith.
Smith provides an alternative to the kind of interest group liberalism that lacks a conception of the common good. His moral system allows for the development of a concept of the common good and of justice. Indeed justice plays a key role in Smith's arguments. Smith's “conception of justice views social interaction as more than the sum total either of purely self-interested individual actions or even of purely benevolent ones.” As a result, modern critics of interest group liberalism show an affinity with Smith's position.
John Rawls's A Theory of Justice (Cambridge, Massachusetts: Harvard University Press, 1971) provides a framework for discussing justice in the Smithian moral system. Rawls's agents decide on principles of justice in a disinterested “original position.” These agents, hidden by a “veil of ignorance” from knowing their respective social positions, determine the principles of justice without vested interests. These principles make the right prior to the good, the reverse being true for utilitarians. Smith probably would have agreed with Rawls; this pits both against interest group liberalism and puts both in favor of justice as fairness.
Smith believes that actions are motivated both by self-interest and sympathy; this permits him to rely on cooperation and synergy in human affairs without calling in government. Morality begins as a simple desire for approbation (which is self-interested), but it evolves into internalized standards emanating from conscience (Smith's “inhabitant of the breast”).
Justice is a prerequisite and primary, for society cannot operate without it. The other virtues need not be similarly compelled by the state, but will develop spontaneously in a just society characterized by mutuality based on sympathy. In this Smith is neither advocating utilitarianism, nor presupposing disinterested benevolence (Rawls misinterprets Smith on this point). Moral rules are not adopted for purely utilitarian reasons by Smith, unless one insists on converting all moral theories into utilitarian ones. Smith and Rawls are closer than Rawls perceives.