Sunday, December 19, 2010

On Adam Smith, Natural Rights, and the Theory of Moral Sentiments

On Adam Smith, Natural Rights, and the Theory of Moral Sentiments
Eliyahu N Kassorla
Economic Principles of Adam Smith
W. Lesperance, Ph.D.        


Liberal theory predicts that the outcomes of social development are increased rights of the individual, an advanced economy, and a system of justice that protects property and rights. John Locke explains how these rights are derived, while Adam Smith explains how these are inevitable consequence of human development. The works of John Locke and Adam Smith have created and shaped our modern definition of liberalism, and their works overlap in scope. The concept of natural rights, as explained by John Locke, was a new principle within the Scottish Enlightenment period. John Locke explains how individuals derive their basic rights, and these notions of liberalism would later influence Smith, who explains the relationship of society to the individual and the economy. Through the pairing of the Locke’s Two Treatises of Government and Smith’s Theory of Moral Sentiments, the reader is exposed to the idea that man creates his own rights, and the rights are a natural consequence of human development and economic advancement.

John Locke, Natural Rights, and Individual Freedoms

Locke’s fundamental assertion is that mankind is born with irrevocable natural rights. Locke explains that the rights of a person are derived from nature itself, and that all men are considered “equal one amongst another without Subordination or Subjugation”[1]. Locke, however, rejects the notion that a “state of nature” is equivocal to a “state of license,” where Natural Law is consent to infringe upon other rights. Rather, Locke explains, “reason, which is that Law teaches all Mankind […] that being all equal and independent, no one ought to harm another in his Life, Health, Liberty, or Possessions”[2]. Life and health, Locke believes, is inherited from a divine origin, as is liberty. Liberty, Locke explains, is derived from a rejection that any human has dominion over another. Property, as the only tangible right, is made more valuable with the addition of personal labor, “for ‘tis Labour indeed that puts the difference of value on everything”[3]. “Thus labor”, being the only commodity that is innate to man, “gave a Right of Property, where-ever any one was pleased to employ it”[4].

John Locke, Natural Rights, and the Rule of Law

            Law, Locke argues, is the method society uses to restrain others “from invading others Rights, and from doing hurt to one another, and the Law of Nature be observed which willeth the Peace and Preservation of all Mankind, the Execution of the Law of Nature is in that State, put into every Mans hands, whereby every one has a right to punish the transgressors of that Law”[5]. Societal punishment is intended to protect the rights of an individual, and discourage the violation of natural law. Violations of natural rights “may be punished to that degree, and with so much Severity as will suffice to make it an ill bargain of the Offender”[6]. Two fundamental powers exist in a “State of Nature”: “the first is to do whatsoever he thinks fit for the preservation of himself and others within the permission of the Law of Nature”, the “other power a Man has is […] the power to punish the Crimes committed against that [natural] Law”[7].

John Locke, Natural Rights, and the Social Contract

            “But though Men when they enter into Society, give up the Equality, Liberty, and Executive Power they had in the State of Nature, into the hands of the Society, to be so far disposed of by the Legislative, as the good of Society shall require”[8]. The return, public good, must be greater than what is given up. Indeed, it is the Lockean assertion that the benefit of entering into the social contract is better than the individualistic anarchy of the state of nature.

Adam Smith and the Relationship between Natural Law and Collective Society

Since the origin and development of the model of natural rights has been discussed, we must move from the individual to the collective. While Locke discusses the value of trading individual rights for the collective benefits, Smith further observes that what is good for the individual is not necessarily good for the society, and that the good of society is composed of more than the sum of its parts[9].
When we are always so much more deeply affected by whatever concerns ourselves, than by whatever concerns other men; what is it which prompts the generous, upon all occasions, than the mean upon many, to sacrifice their own interests to the greater interests of others? […] It is reason, principle, conscience, the inhabitant of the breast, the man within, the great judge and arbiter of our conduct [10].

Smith begins framing his model of civil society by advancing the opinion that humans act out of self-interested motives, but societal structure is beneficial because of reciprocity. Smith argues that “by concerning what we ourselves should feel in the like situation […] we can form any conception of what are his sensations”[11]. This ability to imagine what others, in the same situation, would think or feel is termed “sympathy” by Smith. Sympathy, Smith regards, is the framework that provides each person with their natural rights, and provides the basis of personal interaction. Smith’s contention that were a man to lose his own little finger, he would display more sorrow than would be evoked by a calamity that decimated the whole of China, is both an example, and a reminder that man is fundamentally self-serving. While Smith understands “we are always so much more deeply affected by whatever concerns ourselves than by whatever concerns other men,” he believes that “Nature has lighted up in the human heart”[12]. Smith writes, “One individual must never prefer himself so much even to any other individual as to hurt or injure that other in order to benefit himself”[13]. This rule explains that the interactions between people rely on reciprocal sympathy. “Nature, too, had taught us, that as the prosperity of two was preferable to one, that many, or of all, must be infinitely more so”[14].

Adam Smith and the Origin of Sympathy

The psychology of humankind is primed to experience sympathy, empathize with another, and form a fair and equitable transaction. Were people to interact solely on the basis of self-interest, society would surely collapse. Smith finds this principle so fundamental to his system that Theory of Moral Sentiments begins with this thought: “How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him”[15].
Morality, Smith reasons, is the product of sympathy. Sympathy, then, is the expression of what a man wants done to himself, were he to find himself in the same or similar situation. The ability to abstract and infer the inner thoughts of the observed lays the basis of morality. The social contract requires that members of the society act towards the common benefit, thus requiring the ability to know what another person is thinking or feeling. When actions are consistent with the benefit principle, the actions are labeled as moral.
Smith takes a historical approach to understanding the origins of morality, and through an examination of the past, explores the development of human rights and economics in light of the historical evolution of humankind. Smith, a moral philosopher and observer of society and history, examines both the evolution of cultures and the origin of morality. Civilizations tend to begin as hunter-gatherer-type societies, then progress to herding animals, then discover agriculture, and, finally, engage in commerce. As a moral society, Smith believes, economic rights must be protected, as any other private property must. As the society moves from the primitive systems to commerce societies, individuals become further from their works of labor. End products, however, are still proxies for investment time and labor, according to the abilities and skill of the individual. Advanced commerce societies should protect individual property rights, recognizing that property is an abstraction of personal cost, despite being removed from the direct manufacture of a good.
Adam Smith, in his exploration in the growth of the economy, notes that:
[Among] civilized nations, the virtues which are founded upon humanity, are more cultivated than those which are founded upon self-denial and the command of the passions. Among rude and barbarous nations […] the virtues of self-denial are more cultivated than those of humanity. The general security and happiness […] in ages of civility and politeness, afford little exercise to the contempt of danger, to patience in enduring labour, hunger, and pain [16].

Adam Smith and Morality as a Function of Societal Development

With the growth of the economy comes the increase in moral behavior. Adam Smith believed that the economy drives innovation and industrialization, which makes what was once hard very simple, and that frees us to introspect and not be immoral out of desperation.
Every savage undergoes a sort of Spartan discipline, and by the necessity of his situation is inured to every sort of hardship. He is in continual danger: he is often exposed to the greatest extremities of hunger, and frequently dies of pure want. His circumstances not only habituate him to every sort of distress, but teach him to give way to none of the passions which that distress is apt to excite. He can expect from his countrymen no sympathy or indulgence for such weakness [17].

According to Adam Smith, less technical and less industrial societies, by their virtue of being less developed, have a more rudimentary value system. Smith, by examining the historical development of moral sentiments, elucidates his model of the development of rights. Smith argues that the development of morality is paced with the level of development of the culture. A savage culture, Smith argues, is “more occupied with their own wants and necessities to give much attention to those of another”[18]. Members of a primitive culture are expected to be self-reliant and strong, while sympathy is regarded as weakness. Natural law provides a savage society with protection of works of labor of each man, protecting individual property. Conversely, in a civilized society, where every want and need may be satisfied easily, with division of labor so advanced as to extricate a civilized man from his creations, self-denial and command of the basic passions are virtues expected[19].      


The development of justice is a necessary and proper advancement of a society. “The wisdom of every state or commonwealth endeavours, as well as it can, to employ the force of the society to restrain those who are subject to its authority from hurting or disturbing the happiness of one another”[20]. Smith argues that there exists a universal standard of natural law, and that humans are bound to both live by and protect their natural rights. Smith was clearly influenced by the Lockean assertion that the protection of natural rights provides for a system of justice, which is an acceptable gain compared to the rights waived by submitting to justice.
Having a systematic justice system is the culmination of both moral and social development. An economic system that respects the rights of an individual is crucial to protections of private property, as Locke notes that products of labor contain the essence of the individual. As civilizations develop and progress, the relationship between person and property becomes removed, and the rule of law abstracts the value of labor for procuring property. The protections afforded to individuals under natural law are necessary preconditions for economic development, which drives social progress. In a self-reinforcing cycle, social progress drives further economic development. It is the prediction of Smith that social and economic development invariably leads to greater liberal freedoms, and that liberalism is the inevitable outcome of progress.

John, Locke. Two Treatises of Government Cambridge. 14th. Cambridge: Cambridge University Press, 2003.
Smith, Adam. The Theory of Moral Sentiments. 1st. Amherst, NY: Prometheus Books, 2000.

[1]Locke, p. 269
[2] Locke, pp. 270-1
[3] Locke, 296
[4] Locke, p. 299
[5] Locke, 271
[6] Locke, p. 257
[7] Locke, p. 352
[8] Locke, p. 353
[9] Smith, Part VI, Sec. 2, Introduction, p. 319
[10] Smith, Part III, Ch. 3, p. 193-4
[11] Smith, Part I, Section I, Ch. 1, p.3
[12] Smith, Part III, Ch. 3, p. 193
[13] Smith, Part III, Ch. 3, p. 195
[14] Smith, Part VII, Sec. II, Ch. 1, p. 403
[15] Smith, Part I, Section I, Ch. 1, p.  3
[16] Smith, Part V, Ch. 2, p. 297
[17] Smith, Part V, Ch. 2, p. 297
[18] Smith, Part V, Ch. 2, p. 297
[19] Smith, Part V, Ch. 2 , p. 297
[20] Smith, Part VI, Sec. 2, Introduction, p. 319

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