Natural Price and the Impartial Spectator: A New Perspective on Adam Smith as a Social Economist

Abstract

As social economics is a value‐directed enquiry into economic theory as it pertains to the formulation of economic policy it is incumbent upon the social economist not merely to state a value position but to provide reasons for holding this position. In this manner values enter the realm of rational discourse and are no, longer treated as mere preferences. Since this is precisely what Adam Smith did in the Theory of Moral Sentiments (TMS), the social economist interested in learning from Smith's social economics must confront the issue of the relationship between TMS and the Wealth of Nations. The precise relationship between TMS and WN is at once the most interesting and the most controversial aspect of Adam Smith's social and economic thought. The failure of Smith explicitly to connect the works remains a mystery. Particularly striking is the complete absence of the impartial spectator in WN although there are passages, cited below, which contain reference to ethical judgements implying the spectator thesis of TMS. This article will not attempt to “solve” the Adam Smith problem, nor will it attempt to offer a new proof for or against the consistency of the two great works. Rather, the purpose of this article is to offer an interpretation which makes sense of the TMS‐WN connection which Smith might have used to relate them. The article suggests that Smith could have explicitly introduced the spectator into his chapters on value and distribution in a way which would have consistently linked the social theory of TMS with the economic theory of WN. There is, of course, no strong evidence that Smith actually thought of the connection in the proposed way. However, some textual evidence can be cited to suggest that he may have thought along these lines and that if he did not he might nevertheless assent to this as a legitimate extension of his concepts.

Citation

Young, J.T. (1985), "Natural Price and the Impartial Spectator: A New Perspective on Adam Smith as a Social Economist", International Journal of Social Economics, Vol. 12 No. 6/7, pp. 118-121. https://doi.org/10.1108/eb014000