Will the Real A. Smith Please Stand Up!

Abstract

In both the public and the business world, in academe as well as in practice, the ideas of Adam Smith are regarded as the bedrock of modern economics. When present economic conditions and management practices are criticised, Adam Smith is referred to by defenders and detractors of the current status quo alike. Smith, it is believed, defined the essential terms of reference of these debates, such as the rational pursuit of self-interest on part of the individual and the resultant optimal allocation of goods in free markets thanks to the workings of an “invisible hand.” In this article, we question whether this standard view of Smith, the economist, is tenable. We provide an extensive review of the extant secondary literature from economists, business ethicists, and philosophers, comparing their assessments to crucial elements of Smith’s theoretical system. As a result, we show that Smith, far from being an advocate of a value-free or even value-averse conception of economic transactions, stood for a virtue-based and values-oriented model of business. Accordingly, we argue current management education and the pedagogy of business ethics ought to be changed, and certain strategic conclusions drawn for business practice.

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Notes

  1. 1.

    Chapman (2004), a Reagan advisor, recalls how for the 8 years of the Reagan Administration everybody wore Adam Smith ties (the women wore Adam Smith scarves).

  2. 2.

    We did not include the Business Ethics Quarterly due to the very small number of papers (2) dealing predominantly with Adam Smith. Both papers (James and Rassekh 2000; Wells and Graafland 2012) took the “revisionist” view.

  3. 3.

    We cross- and doublechecked the authors in order to ensure that individual authors were not counted twice. Of the 200 individual authors, 39 (19.5 %) paint a somewhat differentiated image of Smith and 161 (80.5 %) see only the ‘Chicago Smith’. One author (Bragues 2008; 2009) was intentionally counted twice because his 2009 paper painted a somewhat differentiated picture of Smith, while his 2008 contribution depicted Smith in the Chicago mould.

  4. 4.

    Bonar (1922), Foley (1974), and Vivenza (2001) show that Smith got the idea for the division of labour from classical Greek sources—he even quoted almost verbatim from Plato when explaining it in WN.

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Acknowledgments

For instructive criticism and decisive help with the bibliographic apparatus, we wish to thank Katharina Hoegl. We are also indebted to the three anonymous reviewers who made this paper better.

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Hühn, M.P., Dierksmeier, C. Will the Real A. Smith Please Stand Up!. J Bus Ethics 136, 119–132 (2016). https://doi.org/10.1007/s10551-014-2506-z

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Keywords

  • Economic theory
  • Virtue ethics
  • Business ethics
  • Epistemology
  • Adam Smith