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By Root 1208 0

never used the term “capitalism” (I have certainly not found an instance). More importantly, he was not aiming to be the great champion of the profit-based market mechanism, nor was he arguing against the importance of economic institutions other than the markets. Smith was convinced of the necessity of a well-functioning market economy, but not of its sufficiency. He argued powerfully against many false diagnoses of terrible “commissions” of the market economy, and yet nowhere did he deny that the market economy yields important “omissions.” He rejected market-excluding interventions but not market-including interventions aimed at doing those important things that the market may leave undone.

Smith saw the task of political economy as the pursuit of “two distinct objects”: “first, to provide a plentiful revenue or subsistence for the people, or more properly to enable them to provide such a revenue or subsistence for themselves; and secondly, to supply the state or commonwealth with a revenue sufficient for the public services.”11 He defended such public services as free education and poverty relief while demanding greater freedom for the indigent who receives support than the rather punitive Poor Laws of his day permitted. Beyond his attention to the components and responsibilities of a well-functioning market system (such as the role of accountability and trust), he was deeply concerned about the inequality and poverty that might remain in an otherwise successful market economy. Even in dealing with regulations that restrain the markets, Smith additionally acknowledged the importance of interventions on behalf of the poor and the underdogs of society. At one stage he gives a formula of disarming simplicity: “When the regulation, therefore, is in favour of the workmen, it is always just and equitable; but it is sometimes otherwise when in favour of the masters.”12 Smith was both a proponent of a plural institutional structure and a champion of social values that transcend the profit motive in principle as well as in actual reach.

ETHICS, VIRTUE, AND CONSEQUENCES

I turn now from the relevance of Moral Sentiments to Smith’s economic analysis to its salience to ethics and political philosophy. Smith had an abiding interest in how things actually work out, and in recommending actions and rules to be chosen he paid particular attention to the kind of world they would yield.13 But he also noted the importance of the character of the actions themselves and the motivation behind undertaking them—not just what happens at the very end—in identifying what can be seen as virtuous.14

In fact, a broad ethical evaluation of the kind Smith outlined can take note of the virtues both of what actually happened and of the actions taken to produce such outcomes, going well beyond the simple-minded “consequentialist” framework made popular by theories of practical reason such as utilitarian ethics (which insists on attaching direct significance only to utilities that ultimately result). We can take note of the actions undertaken and of the ethical quality of the decision-making that led to those actions, since they are indeed part of what “really happened,” without confining our scrutiny only to what occurred at the “culmination.”15 Smith’s simultaneous interest in virtues and obligations and in what actually happens in the world are comprehensively integrated.

Smith makes an important distinction, in his conception of virtue, between praise and “praiseworthiness,” and focuses on the latter as the legitimate basis for action.16 It is of course the case that a praiseworthy action would also tend to generate actual praise, and this may well be pleasing to the person praised. What Smith argues for, however, is to concentrate not on what would bring praise—despite the happiness it may bring to the person involved—but on whether the action is praiseworthy.

In discussing “the different accounts which have been given of the nature of virtue,” Smith distinguishes among the ways of seeing virtue: first, in terms of “propriety”; second, as fulfilling