Capitalism as a Moral System: Adam Smith's Critique of the Free Market Economy.

• Author: Samuels, Warren J.

Adam Smith's writings have been read and interpreted in various ways by different writers. These varying interpretations can usually be grounded in the original works but represent the particular perspectives of the interpreters, altogether constituting a fundamental hermeneutic problem. One reading is not necessarily correct, though one can subjectively compare and rank different readings.

This perceptive volume can be read at four levels: (1) a close summary of Smith's ideas; (2) a critique of what the author considers the. gross misinterpretation and misuse of Smith's ideas; (3) the meaning of Smith's ideas on the basis of Smith's own theories of rhetoric, science, the impartial spectator, and the origin of moral and legal rules; and (4) the author's (brief but pointed) critique of the current moral status of capitalism.

First, Chapters 2 through 7 present reasonably comprehensive summaries of, or readers' guides to, Smith's works. Chapter 2 treats Smith's theories of wealth; division of labor; theory of value; inequalities caused by both the nature of the employments themselves and government actions; the behavior of landlords and capitalists; capital, private property and saving; and pro-labor attitudes. Chapter 3 treats Books III-V of the Wealth of Nations, focusing on Smith's analyses of economic history; systems of economic policy; and the functions, administration and financing of government. Chapter 4 is a showing that Smith was neither "a strict, dogmatic advocate of laissez-faire capitalism" [p. 51] nor in favor of regressive taxation. Here he, in part, examines regulation and other examples of governmental activism sanctioned by Smith.

Chapter 5, on the Theory of Moral Sentiments, considers human happiness as a function of status; the complexity of Smith's views on the motives for human behavior; and the role of the impartial spectator in the formation of moral judgments and the emergence and revision of moral, and legal, rules, the latter through the formation and internalization of social values and wants.

Chapter 6, dealing with Smith's Lectures on Rhetoric and Belles Lettres, emphasizes the human story-telling and imagination-soothing roles of science, especially the ways in which both represent the invisible chains which connect disjointed objects and introduce a sense of order into apparent chaos.

Chapter 7, based on Smith's Lectures on Jurisprudence, stresses that for Smith capitalism, with its particular...