The Role of Self-Interest in Adam Smith’s Wealth of Nations

Abstract

Werhane challenges the arguments of leading economists, including Milton Friedman, that Smith extols the virtue of self-interest above other virtues, especially in the marketplace. Werhane is careful to explain that for Smith self-interest is a complex notion referring variously to (a) the object of a person’s interests which may be interests in others, in sports, in history, etc. and (b) a person’s interests in herself as the object of her interests. Moreover, this complex self-interest is by no means invariably a vice such as greed or avarice; a self-interested person could simply be someone who was not particularly interested in others without any necessity to consider harming them. In a marketplace setting, or at least in contexts wherein free exchanges may take place, a position that Smith clearly defends against overregulation and feudalism, each of us will be interested in our personal well-being. But Smith cautions that the market works, and works well, only if we (i) treat each other fairly, (ii) engage in fair competition, and (iii) avoid monopolies. Original publication: Werhane, Patricia H. “The Role of Self-Interest in Adam Smith’s Wealth of Nations.” Journal of Philosophy (1989) 86: 669–680. ©1989 Reprinted with permission.