When Self-Interest Trumps Prejudice: Adam Smith’s Market as a Moral Exemplar

Abstract

Purpose

This chapter makes a case for Adam Smith’s description of the market as a moral exemplar. More specifically, it argues that the behavior of the individual agents who inhabit Smith’s market is indeed morally exemplary.

Methodology/approach

The basis for this argument is that economic self-interest drives market participants to look beyond any inherent prejudice or tendency to discriminate on the basis of preconceived opinions or beliefs. Some historical context is provided that illustrates conservative opposition to this perspective from unlikely sources.

A simple moral framework is created to provide one possible representation of Smith’s interpretation of the market. In this framework self-interest is characterized as a “trump” that overcomes potential prejudices. It is further argued that this framework can be considered a moral exemplar, and that it is also important in facilitating exchange between participants.

Findings

The central argument is tested when the self-interest criterion is exposed to competition from the alternative moral value of altruism. The moral framework presented, and the principle of economic self-interest in particular, is resilient against this moral challenge.

Social implications

The social implications of this argument relate directly to our normative understanding of how individuals should behave in a market context. The chapter establishes a link between this moral framework and the functioning of the market.

Originality/value of paper

The chapter is original in its attempt to defend the underlying morality of Smith’s market without recourse to his other works, such as the Theory of Moral Sentiments. It also links an understanding of market egalitarianism with a broader moral framework of market activity. Furthermore, it offers a clarification of why economic self-interest, and not altruism, is the appropriate motivation for market activity.

Citation

Spong, H. (2013), "When Self-Interest Trumps Prejudice: Adam Smith’s Market as a Moral Exemplar", Moral Saints and Moral Exemplars (Research in Ethical Issues in Organizations, Vol. 10), Emerald Group Publishing Limited, Leeds, pp. 5-25. https://doi.org/10.1108/S1529-2096(2013)0000010005