Adam Smith’s Ethics: The Ethics of a Free Society

I want to throw another ethical system into the mix, one promulgated by Adam Smith and other Scottish Enlightenment thinkers. According to Deirdre McCloskey, Smith’s system is a type of virtue ethics involving moral sympathy and approval. His system requires people to weigh moral virtues against social norms in the context of time and place. Taste, aesthetics, and moral sensibility are necessary for making good judgments on ethical questions.

Adam Smith held the chair of moral philosophy at the University of Glasgow for about a decade before leaving for Europe to tutor the Duke of Buccleuch. It was during his time in Glasgow that he wrote The Theory of Moral Sentiments. The book purported to study how people actually made moral judgments. It also discussed the nature of morality. Although Smith has been accused of advocating moral relativism when he suggests that moral authority comes from the judgment of a particular impartial spectator who can vary by time and place, I will argue that Smith believed in clear enduring moral virtues that would be manifested differently in different societies, different circumstances, and different people.

Smith’s moral theory has several facets. First, we need to understand people’s natural sympathy with one another. Why and how do they sympathize with their brothers versus with strangers? How do they decide whether to help their neighbor or to help a refugee half way around the world? Second, we need to examine two of Smith’s most important moral ideas: the man within the breast and the impartial spectator. As people judge the rightness of an action, or determine what they should do, they take counsel of the “man within” who represents to them how an impartial spectator would view and feel about their situation. Finally, we need to understand how Smith thought about virtue. He said that the rules of virtue “are loose, vague, and indeterminate”—meaning that they are not formulaic. But justice, Smith argued, particularly commutative justice, was a unique virtue whose rules are “precise, accurate, and indispensable.” The specialness of commutative justice runs throughout The Theory of Moral Sentiments and has important implications for what governments should do and what should be left to civil society.

Smith’s ethics rely heavily on judging people’s behavior (both ours’ and others’) and on receiving feedback. He says that we naturally expect people to act with propriety—meaning they will act in a way that others believe is acceptable. No bright line exists between praiseworthy and blameworthy behavior. There is a range of acceptable behavior that conforms with propriety. People’s actions can vary in where they fall in that range. But people do not always succeed in conforming to propriety. If they fall far short of propriety, their behavior is blameworthy. If they go above and beyond what is expected, their behavior is praiseworthy.

One of the great strengths of an ethics built upon propriety and sympathy is that it recognizes gray areas and ambiguity. Is someone acting courageously or recklessly? Are they being prudent or selfish? How much can one advance his own material ends before it becomes improper greed? Questions like these abound in almost unlimited number, much as Mises and Hayek described the nearly infinite number of changing production and consumption choices in modern society—choices determined by the transient knowledge of time, place, and preferences. Smith’s ethics address murky situations by weighing the tradeoff between competing moral goods. Advocates of free markets and free societies should find such ethics attractive. They combine the pragmatic element of considering varying circumstances, motives, and consequences of actions while also maintaining enduring moral principles that transcend time and place.

Another reason an ethics of sympathy should be attractive to libertarians is that its mechanisms of enforcement and development are private. Praise and blame come from other individuals, not from governments or the state. Everyone has a moral duty to censure or applaud behavior. They have a role in maintaining decent standards of conduct. And make no mistake, we cannot simply avoid making moral judgments. Anytime we approve or disapprove of something we are judging some aspect of moral goodness. As Jim Otteson has argued, this moral system is like a market, where people exchange judgments, such as approval, disapproval, and ambivalence, towards the norms of behavior, habits, and choices of others. There is room for learning, improvement, and experimentation in applying moral virtues to evolving social norms.

The responsibility for enforcing moral behavior does not entail using violence or physical coercion, but rather using persuasion and censure. Smith’s system of ethics allows for a great deal of variation across groups within society. Communities, either of geography or demographics, can experiment with adopting and enforcing different norms that do not legally bind others outside of that community—though outsiders may feel disapproval or censure when they enter that community and violate its taboos. Being able to allow variation and experimentation in how communities apply moral principles to social norms makes Smith’s ethical system particularly compelling for a huge multicultural society like the United States.

Of course, there are still undergirding moral principles that transcend particular communal norms. These moral principles give outsiders a basis for judging the norms of different communities rather than having to simply accept them in a multiculturalism that claims “all cultures are equal.” ISIS is engaging in unacceptable barbarism, whether or not it operates under the veneer of Islamic or Muslim culture. Murder and theft, abuse and neglect, dishonesty and violence, can be condemned across social groups. But even these seemly absolute and universal evils can become gray around the edges. Are parents who punish their children with a flick on the hand or a spanking abusive and violent? Is it dishonest to hold back information in a transaction (as opposed to actively saying something false)?

I am not an ethicist and do not claim any particular expertise in answering these and many other difficult moral quandaries. The beauty of Smith’s approach to morals, however, as opposed to e.g. Rothbard’s or Rand’s, is that it devotes a lot of attention to gray areas and vagueness. Rather than simply focusing on justice, as important as that is, Smith emphasizes the importance, not only of living virtuously, but of debating, judging, and even censuring others for not living virtuously. Through that process of conversation and judgment, social norms grow, evolve, and improve, thereby promoting social harmony and cooperation.