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J Bus Ethics (2015) 127:327335 DOI 10.1007/s10551-013-2042-2
The Inexorable Sociality of Commerce: The Individual and Others in Adam Smith
David Bevan Patricia Werhane
Received: 5 November 2012 / Accepted: 22 December 2013 / Published online: 12 January 2014 Springer Science+Business Media Dordrecht 2014
Abstract In this paper we reconsider Adam Smiths ethics, what he means by self-interest and the role this plays in the famous invisible hand. Our efforts focus in part on the misreading of the invisible hand by certain economists with a view to legitimizing their neoclassical economic paradigm. Through exegesis and by reference to notions that are developed in Smiths two major works, we deconstruct Smiths ideas of conscience, justice, self-interest, and the invisible hand. We amplify Smiths insistence, through his notions of the virtues, that as human beings, and by analogy, organizations, we are intrinsically social, rather than selsh and or egoistically self-centered. Thus, we have responsibilities to and because of others. We conclude that such a managerialist preoccupation with shareholder value is challenged, if not completely refuted, by taking seriously the social character of Smiths complex vision of commerce.
Keywords Adam Smith Self-interest The invisible
hand fallacy The sociality of commerce
Introduction
In this paper we reconsider Smiths ethics and, in particular, some misinterpretations of what he means by self-interest, and the role this plays in the application of the
(in)famous invisible hand. Our efforts focus on a mis-reading of the invisible hand by certain economists with a view to legitimizing their neoclassical economic paradigm. We consider this (mis)appropriation to be a fallacy that cannot be upheld in the context of a fuller reading of Smith. The paper is divided into two broadly exploratory and exegetic sections, followed by a closing discussion. We open with an exposition of what we call the invisible hand fallacy, and identify the misreadings that seem to persist in mainstream management. Then, by reference to notions that are developed in Smiths major works, The Theory of Moral Sentiments (Smith 1976) (TMS), a book that Smith revised several times after publishing The Wealth of Nations (Smith 1998) (WN), we deconstruct Smiths ideas of conscience, justice, self-interest, and the invisible hand.
Our argument will be advanced through a range of complementary discussions revealing no narrow mercantilist selshness,...