The pivotal second chapter of Adam Smith’s Wealth of Nations, “Of the Principle which gives occasion to the Division of Labour,” opens with the oft-cited claim that the foundation of modern political economy is the human “propensity to truck, barter, and exchange one thing for another. “1 This formulation plays both an analytical and normative role. It offers an anthropological microfoundation for Smith’s understanding of how modern commercial societies function as social organizations, which, in turn, provide a venue for the expression and operation of these human proclivities.
Together with the equally famous concept of the invisible hand, this sentence defines the central axis of a new science of political economy designed to come to terms with the emergence of a novel object of investigation: economic production and exchange as a distinct, separate, independent sphere of human action. Moreover, it is this domain, the source of wealth, which had become the main organizational principle of modern societies, displacing the once-ascendant positions of theology, morality, and political philosophy.
Smith’s formulation transcends a purely descriptive account of the transformations that shook eighteenth-century Europe. A powerful normative theory about the emancipatory character of market systems lies at the heart of Wealth of Nations. These markets constitute “the system of natural liberty” because they shatter traditional hierarchies, exclusions, and privileges. 2 Unlike mercantilism and other alternative mechanisms of economic coordination, markets are based on the spontaneous and free expression of individual preferences.
Rather than change, even repress, human nature to accord with an abstract bundle of values, market economies accept the propensities of humankind and are attentive to their character. They recognize and value its inclinations; not only human reason but the full panoply of individual aspirations and needs. 3 Thus, for Smith, markets give full expression to individual, economic liberty. This combination of analytical and normative arguments provides Smith with conceptual resources for an implicit theory of social integration based on strategic interaction amongst selfinterested persons.
Not just the economy but the larger social order is reproduced by unplanned behavior and processes, rather than by design. 4 Instead of grounding social order in a thick moral consensus and social homogeneity, Smith considered such possibilities to have been eliminated by social and symbolic transformations experienced by modern commercial society. Additionally, with this emphasis on spontaneous coordination, Smith pointed to the possibility of a social order in which people live in harmony together with a minimum need of a central, coercive apparatus.
He captured the central intuition of classical economists according to which modern commercial society, notwithstanding its conflicts, obeys a kind of pre-established order, and enjoys the advantage of a mechanism, the market, which maintains equilibria by continually adjusting competing interests. Over time, this powerful theoretical proposition has become a legitimating cornerstone for the robust defense of market capitalism, a particular ensemble of political institutions, and a specific line of justification for liberal ideas and values.
Though manifestly plausible as an accurate reading of Smith when Wealth of Nations is read on its own, even on these terms, this interpretation, is limited and partial. Astonishingly, and disappointingly, most readers of Wealth of Nations fail to attend the very next sentence that follows Smith’s seemingly transhistorical, objectivist theory of human dispositions, mindful of Mandeville’s classical representation of human egoism.
Smith immediately probed more deeply by asking “Whether this propensity be one of those original principles in human nature of which no further account can be given; or whether, as seems more probable, it be the necessary consequence of the faculties of reason and speech. ” This inquiry, he stated directly, “belongs not to our present subject to enquire. “5 This recusal is striking and puzzling. It also has large theoretical and textual implications.
Within the large body of scholarship on Smith, the book that traces the lineage and attends the consequences of this combination and recusal is Charles Griswold’s recent elegant extensive study. He grasps, almost uniquely, the intertwined connections linking the market, speech, and sympathy: “Life in a market society is an ongoing exercise in rhetoric. “6 Notwithstanding the compelling force of his interpretation, Griswold stops short of developing this important insight.
What we believe to be missing is an effort to conjoin this triad with a striving by individuals for social approbation and ethical recognition, a central feature of Smith’s project and the pivot of this article. Rather than trace back the rhetorical dimension of market relations to the quest for esteem, Griswold halts his account at what Smith called “the desire of being believed. “7 Standing on Griswold’s shoulders, we inquire, again: Did Smith ever, in fact, confront this vexing subject of inquiry, unaddressed in Wealth? If so, where and how? With what results? This article addresses these questions.
We show that Smith devoted considerable attention to these matters, but not in a single, systematic study Rather, his considerations are dispersed in three main texts: The Theory of Moral Sentiments (1759), Letters on Rhetoric and Belles Lettres (1762-1763) and Lectures on Jurisprudence (17621763, 1766). 8 By placing Wealth of Nations within the broader philosophical and moral framework undergirding Smith’s writings, we demonstrate that despite this textual fragmentation he developed a comprehensive and coherent answer to his question about the nature and status of the propensity to truck, barter, and exchange.
Rather than consider Wealth of Nations either as a free-standing text or as the place of departure for a larger grasp of Smith’s theoretical purpose, we approach this treatise as tightly linked to his prior achievements. More than being the cornerstone of his intellectual biography, this classical work caps a long-term project composed of such diverse topics as morality, rhetoric, and law. To better apprehend it, we invert the standard manner in which this book is located in the corpus of Smith. We read Wealth of Nations through the conceptual prism provided by all his major prior writings.
In this account, we place Wealth of Nations in appropriate proportional perspective. Doing so reveals its deeper philosophical objectives and demonstrates how it is dependent and reliant on a more inclusive social and moral theory. 9 Focusing on speech and rhetoric as the main ligaments of social relations, we demonstrate how Smith approached them as constituting attributes of modern markets. Rather than considering markets to be sites for the economic exchange of commodities as such, he treated markets as the modern analogue of previous institutional foundations for social order.
Thus, in modem times, markets are not simply, or exclusively, arenas for the instrumental quest by competitive and strategic individuals to secure their material preferences. Additionally, they are a central mechanism for social integration derived not from strategic self-interest but rather from the inexorable struggle by human agents for moral approbation and social recognition. Smith did not perceive markets exclusively as efficient allocators of resources but as an institutional equivalent of ancient public spaces within which citizens of the classical polls, through speech and deed, struggled for recognition.
He understood, of course, that for the ancients, the content of recognition-greatness through public dedication to the common good rather than greatness as material wealth– as well as the location of the endeavor-ekklesia rather than agora-differed from those of the moderns. Undergirding both, however, is the existence of an identical drive to acquire social esteem and praise. This, Smith believed, provides a universal, transhistorical, motivation for human action, the main torque by which societies achieve cohesion and continuity.
Like Constant, who addressed how the liberty of the ancients could not be reproduced under conditions of modern social pluralism, Smith understood that the forms and institutional means they had designed to achieve social integration had become irrevocably extinct. 10 Unlike Constant, however, who thought the liberty of the moderns had to be reinvented ex nihilo, Smith believed modern modalities for order would not differ radically from those of the ancients because both are based on the similar, and natural, quest for approbation and esteem.
Of course, Smith, like so many in his age, acknowledged the break represented by modernity and capitalism; at the same time, he allowed room in his theoretical construction for continuity. Contrary to excessive celebrations of newness characteristic of many immoderate and presumptuous endorsements of modern times, Smith investigated the multiple configurations linking past and present. The steps in our argument begin, in Part One, with a discussion of the master concept of sympathy in Moral Sentiments.
This notion we retranslate, via approbation and esteem, into a modern theory of recognition. In Part Two we demonstrate how Smith, in his Rhetoric, established the mutual constitution of recognition and speech. Then, in Part Three, we carry this understanding to his Jurisprudence, where we discover Smith’s first formulation of his original theory of the market according to the terms derived from his earlier investigations in moral and social theory. Here, the market is revealed in its deepest sense (a sense deeper than its treatment in Wealth of Nations, which represented a specific, partial, focused, even epiphenomenal, treatment of a vital, but singular, feature of the market).
I In his effort to explain the nature and the particular mechanisms of moral sentiments, Smith, clearly influenced by David Hume,12 further elaborated the seminal category of sympathy. He inserted this concept as a mediating device between what he conceived to be two opposed poles that dominated modern, secular, moral philosophy: Hutcheson’s naturalistic theory of benevolence and Mandeville’s ethics of self-love.
For Smith, Hutcheson’s assumptions about the kind, unselfish qualities of human nature made his moral system unrealistic, even utopian; it thus failed to take into account the complexity and ambivalence of the actual psychological motives of human action. 13 Mandeville, by contrast, Smith thought, while successfully unmasking and demystifying idealizations shared by the predominant moral theories of his time, such as those of Lord Shaftesbury and Bishop Butler, had adopted a reductionist model that leveled everything down to the universal, objective, and inexorable fact of self-interest. 14
Smith refused both approaches, deeming them, despite their opposition, equally monistic and one-sided. To enrich our knowledge of moral psychology, he proposed instead a different moral theory based on sympathy. 15 On this view, moral judgments are derived from a person’s ability to identify with someone else’s situation and feelings through the faculty of imagination. 16 From this empathetic capacity to enter and experience the position of another, Smith extracted conceptual resources to elucidate the elementary multifarious processes by which people make valid moral evaluations, bridging the gap between the self and the other.
The competence of individuals to undertake moral distinctions between the good and the bad, Smith argued, depends on their prior ability to sympathize. Through their passion, not reason, individuals communicate at depth with each another. 17 By such acts of imaginative identification, they reach moral conclusions. Thus, the measure of morality varies according to whether sympathy can be achieved. 18 Only when a subject can sympathize with the social and subjective situation of its interlocutors, and with their acts and passions, can they be judged as moral.
The attributes of goodness and virtue are contingent, therefore, on whether they have become objects of sympathy By contrast, emotions with which the subject cannot sympathize, Smith claimed, are discredited as vicious and immoral. 19 According to this anti-cognitivist ethical system, humans adopt a moral stance toward the world, others, and themselves, and judge the moral validity of facts and behavior by means of the faculty of sympathy This psychological and affective capacity permits them to approve or disapprove of situations and events directly related to the feelings of pleasure and pain experienced by another actor.
Hence, on the problem of how agents arrive at valid moral judgments, Smith identified psychological mechanisms involving the use of imagination and reflection. Sympathy, in short, is the chief criterion of moral judgments. 20 People do not empathize with virtuous intentions and situations as such, but some qualify as virtuous because they have sympathized with them. 21 For Smith, sympathy is neither an epiphenomenon of a deeper, more authentic, purely egoistic motive, a distant and disguised echo of self-love,22 nor is it a mechanical and linear expression of a natural and unchangeable benevolent and altruistic disposition.
Furthermore, he did not attribute the origins of sympathy to an antecedent utilitarian principle. 24 To be sure, Smith alluded to this interpretation by noting that a person’s ability to sympathize can be determined in part by the pleasure that can be derived from identifying with another’s situation; reciprocally, one’s aversion is informed by the pain that can result by acts of empathy. 25 Notwithstanding, he insisted that “in all these cases, however, it is not the pain which interests us but some other circumstances. “26 Utility is not the driving force behind sympathy.
Indeed, for reasons of theoretical consistency, Smith could not have adopted positions he identified with Hume, Hutcheson, and Mandeville and which he had criticized and rejected. In fact, he did more than simply distance himself from them. He sought to transcend them by developing a fresh moral stance that Andrew S. Skinner has correctly characterized as having “a synthetic character,”27 illustrating Smith’s disagreements with these three moral philosophers. 28 But if utility is not the motivational power that informs and shapes sympathy, why do humans empathize with each other?
What is the underlying motivation of identification? Is sympathy the ultimate foundation of our moral abilities, a natural, uncontested ground upon which we built our ethical evaluations? Is Smith’s concept of sympathy his own particular version of the idea of a natural moral sense, the expression of a belief in “natural sentiments,”29 thus with the same status as the foundational attributes of benevolence and self-love? There is no doubt that once Smith had rejected self-interest, benevolence, and utility as potential meta-theoretical presuppositions, little is left to explain the anterior basis of sympathy.
Nonetheless, despite the incompleteness and elusiveness of his account, he did, in fact, develop an extremely original and strikingly modern moral theory, which today, as discussed below, could be called a theory of recognition, by probing the antecedent layers of sympathy. For Smith, a person’s need for moral approbation, social approval, and intersubjective acceptance, which is a basic human drive, motivates the ability to sympathize with the other’s emotions and passions. 30 We sympathize with fellow beings because we wish to be praised, esteemed, even loved.
As Smith forcefully put the point, both the ability and inner drive for sympathy are based on the primordial and archaic compulsion “to be observed, to be attended to, to be taken notice of with sympathy, complacency, and approbation… of our being the object of attention and approbation. “3” Thus, sympathy “is founded altogether in the desire of actual praise, and in the aversion of actual blame. “31 Humans are attuned to sympathize with the emotional states and situations of others as a consequence of the more profound, substantive aspiration to be acknowledged as moral persons embedded in the broader social tissue of human relations.
We pursue this desideratum, Smith argued, indirectly. By sympathizing with other persons, we enter into their moral universe and thus can see ourselves through their perspective and sentiments. By so doing, we become aware of the interpretative and axiological criteria with which they judge us and which we, in turn, as interlocutors, can satisfy to reciprocally gain their praise and approval. 33 Neither nodal, isolated individuals nor products of reified societies and abstract norms, humans are instead continuously engaged in relations and networks within which they adopt perspectives of the other.
Seeing themselves from points of view which, at once, are external and rooted in social relations in which they participate, as if through a “looking-glass,”34 they become, in a metaphorical sense, “the impartial spectators of our own character. “35 Sympathy thus is an emotional, intersubjective form of seeing oneself through others and affirming one’s personal worth through the approbation of fellow beings. Through empathy and imaginative identification, social actors enlarge their mentalities, insert themselves within networks of social and moral approbation, and negotiate the qualities and content of mutual approval.
As Luigi Bagolini correctly observed, sympathy “is founded directly on the desire to receive the praise of others at once and, correspondingly, on the desire to avoid the immediate condemnation of others…. [It is also] based on the desire to possess these qualities and to achieve those actions that the judging subject himself admires in others. “37 Smith’s original understanding of these mechanisms crosscuts naturalistic theories positing the intrinsic sociability of individuals and those presenting an essentialist interpretation of social relations as effects of purely egoistic, self-regarding considerations.
There is no self outside relations of intersubjective apperception. The ability to form a coherent personal identity is directly associated with the form and scope of the broader interpersonal structures of social interaction. With his focus on the complex, nuanced drive by individuals for moral and social approbation, Smith astutely struck a balance between self-love and benevolence; and, in contemporary terms, between the individual and the community, the good and the right, substantive ethics and formal morality.
This tension-ridden relation, however, does not dissolve the distance attendant on their connection but instead seeks to accommodate the one to the other in a process of continuous adjustment and mutual reinforcement. It is true that with sympathy, we come very close to satisfying our personal need for praise and advancing our emotional, social, and symbolic well-being. Notwithstanding, this self-centered orientation is comprised simultaneously by an explicitly social, intersubjective content that transcends mere egoism and reveals how the individual itself is constituted by prior patterns of interaction.
For Smith, the self is never disembedded or “unencumbered. “38 Rather, as he put it, “their approbation necessarily confirms our own self-approbation. Their praise necessarily strengthens our own sense of our own praiseworthiness. In this case, so far is the love of praise-worthiness from being derived altogether from that of praise; that the love of praise seems, at least in a great measure, to be derived from that of praiseworthiness. 9
This dialectic between the ego and the other finds expression in sympathy, which provides, by linking self-esteem to social praise, the psychological and social mechanisms undergirding social integration. “Nature,” Smith argued, “when she formed man for society, endowed him with an original desire to please, and an original aversion to offend his brethren. She taught him to feel pleasure in their favourable, and pain in their unfavourable regard. She rendered their approbation most flattering and most agreeable to him for its own sake; and their disapprobation most mortifying and most offensive. “
