Examining "The Adam Smith Problem": Individuals, Society, and Value

In this paper I offer an analysis of the Adam Smith Problem. This Problem arises from perceived inconsistencies between Smith's economic work, The Wealth of Nations, and his moral theory, the Theory of Moral Sentiments. I argue that far from being inconsistent with Smith's economic theory, his moral theory serves as a necessary foundation. I suggest that, because he takes humans to be moral by nature, Smith defends social capitalism which requires moral economic agents rather than homo economicus. I then sketch some specific implications for the moral limits of Smithian social systems.