Ethics & Economics

Adam Smith, the father of economics

propounded the idea of free-market
capitalism. He gave emphasis to self-
interest and said that it encourage people
to work. He pointed out that, It is not
from the benevolence of the butcher, the
brewer, or the baker, that we expect our
dinner, but from their regard to their own
interest[Nature and Causes of Wealth of Nations(1776)].
Smith further categorically said such pursuits
need to be controlled(i.e. one should know his
or her limit and should not become selfish) .
Every individual, so long as he does not abuse
the law and be fair, is left entirely free to
pursue his individual interest his own way.
He/she is free to take his resources into
competition .
Such a quest is appropriate
because according to Smith, if
every one pursue self-interest,
society would be better off, as if
led by an invisible hand. That
view instill the system of free-
market capitalism .
In Theory of the Moral Sentiments, Adam Smith,
talked about the two basic virtues i.e. justice
and benevolence. He holds that any civilized
society including, the modern market society,
should maintain these basic virtues .But
advocates of Adam Smiths economics too
often ignore his ethics, without understanding
the fact that Economics is unworkable without
the Ethics.
In Wealth of Nations, the bible of capitalism, he
provides an answer to the question he raised in
Theory of Moral Sentiments" i.e. for what purpose,
is all the struggle for wealth exist in this world?
Where is the end of greed and aspiration, of the
pursuit of wealth, of authority and domination?
His answer is ; all the dirty pursuit for wealth and
fame has its ultimate justification in the welfare of
the common man.