Thursday, August 16, 2012

Adam Smith's Non-Existent Problem

Larry Arnhart’s Blog, Darwinian Conservatism, asks “Does Oxytocin Solve the Adam Smith Problem? HERE 
 It is too long to quote in full (follow the link).  It contains this paragraph:
What Smith identifies as the "propensity to truck, barter, and exchange" is actually moral in the sense that we must care about the needs of others if exchange is to be successful.  For you to give me what I want, I must give you what you want.  And that means that I must serve the needs of others, so that they will serve my needs.  Ultimately, trade is in the self-interest of each trader.  But a purely selfish trader who cares not at all for the interests of others, and who is willing to cheat others whenever possible, is not likely to be a successful trader for very long.
This expresses a view with which I fully agree and I have often expressed it in similar words on Lost Legacy.   However, without developing my argument just now, I have expressed the view that if you understand Smith’s Moral Sentiments on morals and Wealth Of Nations on the meaning of self-interest, there is and never was an “Adam Smith problem”. 
Smith’s 19th- century German critics, who alleged there was such a problem, were just plain wrong.
Once the erroneous early 19th-century notion that Smith favoured and advocated laissez-faire became a general belief, those lat-19th-century German critics chased a non-existent, errant Adam Smith down a cul de sac of their own making.
Larry Arnhart, the author of the above paragraph, grasps the difference between Adam Smith’s ideas on self-interest and modern notions from the “greed is good’ school of Ayn Rand and Hollywood screen writers.
In answer to Larr’ys question: “Does Oxytocin Solve the Adam Smith Problem?”, the short answer is ‘no’, interesting as the “The Moral Molecule”, the new book by Paul Zak, might be for readers.


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