Adam Smith on Sympathy: From Self-Interest to Empathy

Abstract

Is the assumed self-interested behavior in economics at odds with altruism and compassion? I believe that this question — which has been formulated in various ways in the literature for the past two centuries — is the thorn that often turns us away from reconciling the Adam Smith of the Wealth of Nations (hereinafter WN) with the Adam Smith of The Theory of Moral Sentiments (hereinafter TMS). Economics has certainly made WN the most known contribution by Smith since it is generally assumed that the publication of WN marks the beginning of economics as a discipline independent from philosophy. Indeed, it is a widely held belief that the concept of self-interest is not only central to WN, it also established self-interest as the founding principle of economic theory. For example, in his ‘Mathematical Psychics: an Essay on the Application of Mathematics to the Moral Sciences,’ F. Y. Edgeworth wrote, ‘the first principle of economics is that every agent is actuated by self interest’ (1881, p. 16). This was a received view at the time and the sentiment has not changed much since then, although the self-interest paradigm has graduated into the more sophisticated abstraction of utility-maximizing behavior. Under this more palatable name, self-interested behavior has been attributed more broadly to all human behavior, not just economic phenomena. Gary Becker, for example, claims that ‘the economic approach is a comprehensive one that is applicable to all human behavior’ (1976, p. 8).