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Most Adam Smith scholars hold that Smith endorsed public provision of education to offset deleterious consequences arising from the division of labor. Smith’s putative endorsement of publicly funded education is taken by some scholars as evidence that he tends more toward progressive than classical liberalism, or that this is a departure from, perhaps an inconsistency with, Smith’s otherwise strong presumption against government intervention in markets. This paper argues that these interpretations are flawed because Smith ultimately does not advocate public provision of education. He raises the idea and explores its potential benefits, but he ultimately does not endorse it. Smith also provides reason to be skeptical of public provision of education, which suggests that his final position may have inclined against it.

When did liberal political theory, or perhaps liberal political economy, begin? Although many would trace their beginnings to the writings of Adam Smith, David Hume, or perhaps John Locke, in fact many of the propositions we today recognize as forming the core of liberalism were articulated in the first half of the seventeenth century by an unduly neglected group called the Levellers and their leader John Lilburne. In this essay, I first give some historical background and context to the Levellers and Lilburne. Next, I articulate several of their liberal positions, including freedom of religion, freedom of speech, and freedom of commerce and trade, and I examine their justifications for these positions, which I argue were both novel and radical. I conclude by exploring the contemporary relevance of the Levellers and argue that they should be considered as among liberalism’s most important founders.

Chamlee-Wright (2019) argues that Adam Smith’s moral psychology can help us understand the phenomenon of self-cenorship in today’s academy. But the lynchpin of Smith’s psychology, the desire for mutual sympathy of sentiments, can serve at least two purposes: pulling us into beneficial community with others, but also creating–and solidifying–social division. These two purposes can conflict and lead to potential problems: they can make it more difficult to nurture creativity, and they can lead to stigmatizing, ostracizing, and otherizing those outside the community. These problems can lead to stifling of, and underinvestment in, the innovative thinking necessary for a robust “life of the mind.” I diagnose the problem, explain the dynamics involved, and suggest a potential way out of the impasse.

You have heard of the Seven Deadly Sins: pride, greed, lust, envy, gluttony, wrath, and sloth. Each is a natural human weakness that impedes happiness. In addition to these vices, however, there are economic sins as well. And they, too, wreak havoc on our lives and in society. They can seem intuitively compelling, yet they lead to waste, loss, and forgone prosperity. In this thoughtful and compelling book, James Otteson tells the story of seven central economic fallacies, explaining why they are fallacies, why believing in them leads to mistakes and loss, and how exorcizing them from our thinking can help us avoid costly errors and enable us to live in peace and prosperity.

Over the past decade, corporate scandals have proliferated. These scandals along with the emergence of the #MeToo movement and Environmental, Social, and Corporate Governance (ESG) mandates, have increased the scrutiny of corporations’ ethics culture. How have companies responded in terms of the language appearing in their public ethics documents? We compare the Code of Ethics in 2008 versus 2019 for a sample of S&P 500 firms. The general trend is for firms to lengthen their Code of Ethics. On average, the 2019 codes are 28 percent longer (more than 1,690 words) than in 2008. The language of the codes has also changed. Words like bribery, corruption, sustainability, speak up, intimidation, slavery, and human rights all saw significantly higher usage in the later period. We review possible reasons for the dramatic changes, and suggest what questions remain about the motivations behind them. Whether the changes we observe are primarily intrinsically motivated or simply market responses to public pressures is yet to be determined.

Adam Smith argues that virtue falls into two broad categories: “justice,” which he calls a “negative” virtue because it principally comprises restraint from harming or injuring others; and “beneficence,” which he calls “positive” because it comprises the actions we ought to take to improve others’ situations. Smith’s conception of justice is thus quite “thin,” and some critics argue that it is indeed too thin, since it fails to incorporate substantive concerns for the well-being of others. In this essay, I lay out Smith’s conception of justice and offer a way to understand it that attempts to comprehend the various things he says about it. I then offer a cluster of objections drawing on criticisms that might fall under the heading of “social justice.” Finally, I suggest how Smith might respond to the criticisms by outlining a Smithian conception of what I call “ultimate justice.”

Markets are often criticized for being amoral, if not immoral. The core of the “political economy” that arose in the eighteenth century, however, envisioned the exchanges that take place in commercial society as neither amoral nor immoral but indeed deeply humane. The claim of the early political economists was that transactions in markets fulfilled two separate but related moral mandates: they lead to increasing prosperity, which addressed their primary “economic” concern of raising the estates of the poor; and they model proper relations among people, which addressed their primary “moral” concern of granting a respect to all, including the least among us. They attempted to capture a vision of human dignity within political-economic institutions that enabled people to improve their stations. Their arguments thus did not bracket out judgments of value: they integrated judgments of value into their foundations and built their political economy on that basis.

Chapter 4 raises the question of how markets and morality go together, and how our conception of honorable business might deal with some of the leading objections critics have raised to markets and business. It looks at and offers initial responses to a several worries, including inequality, unfairness and luck, externalities, low worker pay, price gouging, manipulation of consumer desires and choices, and profit-seeking. It also explores the notion of corporate social responsibility (CSR), and the extent to which there can be such a thing as “honorable profit.” Finally, the chapter suggests that the field of political economy, which informs the argument of this chapter and the book, is an exercise not in ideal theory but rather in practical, second-bests—and, as such, should aim at steady and widespread improvement if not perfection.

Chapters 7 and 8 look more carefully at a series of worries about, and objections raised to, business, markets, and commercial society generally. Chapter 7 looks specifically at concerns about how we should treat people and whether markets and business are, or can be, consistent with proper relations among people. It examines the inequality to which markets can lead, considering in this connection G. A. Cohen’s famous “camping trip” scenario and his argument for “socialist equality of opportunity.” In contrast to Cohen’s “camping trip,” this chapter offers a “shipwrecked on an island” scenario, from which conclusions different from Cohen’s may be drawn. The chapter also examines the seeming unfairness of some of the outcomes of business activity, including in particular the undeserved luck involved. Finally, it explores the instability and displacement inherent in the “creative destruction” (in Schumpeter’s famous phrase) of markets, including its effects on human community.

Many people are suspicious of business, as well as of markets and commercial society. Are they right to be suspicious? Examples like Enron and Bernie Madoff do not help the impression many have of it as prone to dubious behavior and potentially disastrous negative consequences. But there are bad actors in all walks of life, not just in business. Is there something special about business that encourages, or even rewards, bad behavior? Can there be such a thing as honorable business? While there certainly is dishonorable business, there is indeed also such a thing as honorable business. Honorable business sees as its primary purpose to create value—for all parties. It looks for mutually voluntary and mutually beneficial transactions, so that both sides of any exchange are benefited, leading to increasing prosperity not just for one person or for one group at the expense of others but simultaneously for everyone involved. Done correctly, honorable business is thus a positive-sum activity that can enable flourishing for individuals and prosperity for society. This book offers a conception of what it means for an individual to flourish and what the public institutions are of which honorable business can form an integral part. It also offers original responses to several central objections raised to business, markets, and commercial society. It argues for a new framework for business ethics that articulates the role that the honorable businessperson, and honorable business, can, and must, play in a just and humane society.

Chapter 3 argues that the ultimate purpose of business is to create value—for all parties, simultaneously. It explains what the purpose of a firm is, and, on that basis, it offers a proposal regarding what should be part of any firm’s mission statement. It then proposes a code of business ethics that captures the duties of the individual businessperson, and goes on to articulate a conception of honorable business that allows business to achieve its main purpose of the creation of value. This code enables the individual to navigate the inevitable dilemmas that arise in business, which are in important respects not dissimilar to dilemmas that arise in other walks of human life. It also describes a conception of professionalism that connects to business’s purpose and the “hierarchy of moral value” of which it forms a part.

Chapter 6 looks at several problems businesses can face in the achievement of their proper goal within a market economy. These include Karl Marx’s notions of “alienation,” lying, and exploitation, the extent to which markets and commercial society can conflict with some of our deep-seated and possibly pretheoretic intuitions, and problems associated with asymmetries of knowledge and so-called rational ignorance. This chapter outlines how businesses should deal with such worries and address them in good faith. It also articulates a claim about the proper scope of business’s moral obligations, which will go some way toward helping businesses focus not only on what they can do but on what they should do.

The term “honorable business” will strike many as counterintuitive. Many are suspicious of business, as the widespread notion that business, or businesspeople, should “give back” to society—perhaps to atone for their sins—suggests. Honorable Business argues that there is a way of understanding business activity such that it is beneficial and even morally praiseworthy, and thus not in need of atonement. The introduction to Honorable Business outlines the elements of the book’s argument, including the content of each chapter, but it also places the book’s argument in its proper context: who its audience is, and why its argument is necessary.

Chapter 9 brings the threads of the previous chapters together to develop an integrated picture of honorable business. It first argues that there is such a thing as honorable business, and it articulates its core elements, linking them to the conception of moral agency, hierarchy of moral value, and code of business ethics developed in earlier chapters. It also describes what dishonorable business is. It articulates the “negative” duties of business—the “don’ts—as well as its positive obligations—the “dos”—and argues that the “don’ts” require our attention first, but that the “dos” nevertheless can generate obligations as well. Chapter 9 suggests that honorable business not only provides material prosperity but also enables and encourages proper moral relations among people based on the mutual respect that our inherent dignity requires. Seen in the proper light, this conception of honorable business could actually be a moral calling.

Chapter 8 looks at several more worries about, and objections raised to, markets and business. This chapter focuses specifically on concerns raised about how markets can induce us to misvalue things—valuing some things too highly, valuing other things not enough. Chapter 8 argues that it is not things but rather people and their choices that should be valued. It also argues that one can advocate both liberty and virtue, that is, respecting people’s right to choose while retaining the moral authority to criticize—though not interfere with—their choices. It argues that working for wages is not plausibly similar to slavery and hence, contrary to some critics’ claims, should not be described as such. Finally, the chapter discusses tragedies of the commons and explores the ways that honorable business might address and mitigate some, if not all, of them.

Chapter 5 completes the argument on honorable business by specifying a “hierarchy of moral value” linking the individual businessperson’s activities to the purpose of a firm within a properly functioning market economy that is itself part of a just and humane society. If these relationships have been correctly described, the individual businessperson should be able to give an account of his or her professional activities that connects them all the way up the chain of moral purpose to the kind of society in which we should all want to live. The chapter also looks at the increase in material prosperity the world has experienced since approximately 1800 and connects that prosperity to the “hierarchy of moral value.” The chapter considers the role of government and regulation in the creation of prosperity and explores the extent to which the present argument connects to ethical theories of deontology, utilitarianism, and virtue ethics.

Chapter 2 investigates the explanation Adam Smith gave in his famous Wealth of Nations (1776) for why some places are wealthier than others, and what political, economic, and other social institutions are required for increasing prosperity. The chapter discusses the conception of “justice,” as opposed to “beneficence,” that Smith offered The Theory of Moral Sentiments (1759), as well as Smith’s economizer, local knowledge, and invisible hand arguments from his Wealth of Nations that form the basis of his political economy. We look at the duties of government implied by Smithian political economy, including both what he argues government should do and what it should not do. We also look at empirical evidence to answer the question of whether Smith’s predictions on behalf of his recommendations have come true in the intervening centuries.

Chapter 1 addresses the central importance of asking the why of everything we propose to do, not only the how. This is as important in business as in any other walk of life. This issues from the fact that human beings are essentially purposive creatures, that is, creatures who create and pursue ends, goals, and purposes. The final or ultimate goal of human life is, as Aristotle argued, eudaimonia—“happiness,” “well-being,” or “flourishing.” If that is our ultimate end, then all our activities should be deliberately ordered to help us achieve it. That includes business, and the political and economic institutions in which business operates. This chapter argues that business should contribute to and reflect our pursuit of eudaimonia. It closes with questions that this conception of human purposiveness suggests should be investigated, pointing the path forward for the rest of the book.

Richard Thaler and Cass Sunstein argue for “libertarian paternalism,” defined as the strategy to devise policy that will “maintain or increase freedom of choice” and at the same time “influence people’s behavior in order to make their lives longer, healthier, and better”. These two goals are often in conflict, and striking the right balance between them has proved difficult in both theory and practice. Where does Adam Smith fall in this debate? This chapter argues that Smith developed his own version of “libertarian paternalism.” It differs in important ways from that of Thaler and Sunstein, but it shares with them an attempt to balance respect for individual autonomy with a desire to help people lead better lives. Smith’s position accommodates the importance of both liberty and paternalism in enabling individuals to construct lives worth living, while avoiding some of the problems that have beset more recent versions of libertarian paternalism.

Adam Smith raised a series of obstacles to effective large-scale social planning. In this paper, I draw these Smithian obstacles together to construct what I call the “Great Mind Fallacy,” or the belief that there exists some person or persons who can overcome the obstacles Smith raises. The putative scope of the Great Mind Fallacy is larger than one might initially suppose, which I demonstrate by reviewing several contemporary thinkers who would seem to commit it. I then address two ways the fallacy might be overcome, finding both wanting. I close the paper by suggesting that Smith's Great Mind Fallacy sheds interesting light on his “impartial spectator” standard of morality, including with respect to the specific issues of property and ownership.

Evaluation de la conception du jugement individuel developpee par S. Fleischacker comme troisieme voie entre la liberte negative et la liberte positive chez I. Berlin. Examinant le programme politique et le role du gouvernement qui en resultent, l'A. montre que la position de Fleischacker rencontre le meme probleme que celui auquel se heurtent la philosophie de Kant, la philosophie de Smith et la theorie communautariste: la reconciliation des liberte individuelles et de l'etat comme condition premiere de l'exercice de la citoyennete.

Introduction One reason G. A. Cohen endorses progressive taxation, even aggressively progressive taxation, in the service of socialist equality is because he believes that great inequality imperils genuine community. Cohen asks us to imagine a wealthy and privileged person, and a poor and unprivileged person. Both of them enjoy the “negative” freedom accorded by Adam Smithian “justice,” which Smith defined as comprising only three things: integrity of one’s person, integrity of one’s property, and integrity of one’s voluntary promises and contracts. Because the Smithian government’s primary responsibility is to protect this conception of justice, its main duties are hence the protection of life, property, and contract. Smith called these duties “negative” because, as he vividly put it, one could “fulfil all the rules of justice by sitting still and doing nothing” (TMS, 82). Justice for Smith thus contrasted with other, “positive” virtues, which required taking positive action to fulfill, and included things like friendship, loyalty, charity, hospitality—all the virtues that fall under Smith’s general heading of “beneficence.” Suppose, then, both Cohen’s wealthy person and his poor person are enjoying protection of this minimalist Smithian justice, and hence the Smithian state owes neither of them anything more. Yet the vastly different experiences each of them would have had over the courses of their lifetimes would make them, Cohen argues, vastly different people. They would have different home lives, different schooling and education, different vocations and job training; they would likely not eat in the same restaurants, take their children to the same parks, shop in the same stores, read the same books, watch the same television shows, vacation in the same places. They would, in short, live in virtually separate worlds, even if physically proximate: if they happened to ride the same bus one day, they would hardly recognize each other as fellow citizens and would scarcely have anything even to talk about. Cohen concludes that they can therefore share no real community (2009: 36).