Professor Jack Weinstein Discusses Adam Smith’s Free Market Theory

On Tuesday April 21st, the Guarini Institute for Public Affairs hosted Professor Jack Weinstein, from the University of North Dakota, to discuss his challenging reading of Adam Smith’s free market theory. Weinstein started his analysis by focusing on Smith’s optimistic view of greed and his famous idea of the “invisible hand” in An Inquiry into the Nature and Causes of the Wealth of Nations. There, Smith explains that greed “for life, for money, for knowledge” is “right” and “works” because its intrinsic creative and positive force leads the economic system to develop and improve over time. This positive connotation of greed is rooted in Smith’s idea of self-interest. Indeed, Smith thinks that it is wrong to associate self-interest with mere egoism because in reality self-interest is productive and beneficial to the whole society, insofar as each individual’s own interest serves to satisfy other individuals’ needs. Thus, Smith claims that society as a whole is promoted not by our benevolence, but by our individual interests.

However, Weinstein problematized this common understanding of Smith by turning to another important work, The Theory of Moral Sentiments. According to Weinstein, this work was revolutionary in providing “a social theory that glorified the role of emotion”, and in particular by emphasizing the role of our natural “sympathy” in social life. This led Smith not only to consider human identities and interests as relational and constructed, but also to claim that sympathy grounds the regulations on markets necessary to make them function, as well as the provision of non-market-based public services like education. Weinstein thus argued that the understanding of Smith as an unqualified defender of free markets is one-sided and neglects the other valuable contributions that Smith’s thought can make to reflection on contemporary public affairs.