In Wealth of Nations,
Adam Smith argues that the aggregation of the preferences of consumers and
producers for a given good is in the public interest for the product or
service. Often overlooked is Smith’s Theory
of Moral Sentiments, in which the famous economist wraps a moral sentiment
around the individual preferences, hence hopefully constraining them, albeit
voluntarily. Herein lies the rub, for it is shaky to assume that a preference
that seeks to maximize itself will voluntarily restrain itself when it rubs up
against an ethical limit that is felt. Such a moral constraint is like a
semi-permeable membrane in that the sentiment naturally triggered when a person
comes on an unethical situation or person can be ignored or acted on.
The full essay is at “Private
Interests Over the Public Good.”
