The Adam Smith Problem in Reverse: Self-Interest inThe Wealth of NationsandThe Theory of Moral Sentiments

In identifying the tensions between the two treatises that Adam Smith (1723-90) published during his lifetime' - The Theory of Moral Sentiments' (1759) and 'The Wealth of Nations(1776) - 'it can be seen that the first is more favorable to self-interest. The author presents the effects of self-interest under ideal conditions, examines some of the abuses of self-interest, and describes how Smith deals with abuses of self-interest. Smith's first, lesser known treatise paints a picture of self-interest that more closely resembles that portrayed in modern economics: both the individual and society are better off when individuals pursue self-interest. In fact, there are both positive and negative accounts of self-interest, in addition to the remedies available against its excesses. Thus, a specific situation or set of circumstances may apply with cogency to the butcher, the baker, and the brewer, but the same does not necessarily hold true for merchants or manufacturers.