The most influential economist: adam smith

The Theory of Moral Sentiments[edit]
Main article: The Theory of Moral Sentiments
In 1759, Smith published his first work, The Theory of Moral Sentiments, sold by co-publishers Andrew Millar of London and Alexander Kincaid of Edinburgh.^[78] Smith continued making extensive revisions to the book until his death.^[e] Although The Wealth of Nations is widely regarded as Smith's most influential work, Smith himself is believed to have considered The Theory of Moral Sentiments to be a superior work.^[80]
In the work, Smith critically examines the moral thinking of his time, and suggests that conscience arises from dynamic and interactive social relationships through which people seek "mutual sympathy of sentiments."^[81] His goal in writing the work was to explain the source of mankind's ability to form moral judgment, given that people begin life with no moral sentiments at all. Smith proposes a theory of sympathy, in which the act of observing others and seeing the judgments they form of both others and oneself makes people aware of themselves and how others perceive their behaviour. The feedback we receive from perceiving (or imagining) others' judgment creates an incentive to achieve "mutual sympathy of sentiments" with them and leads people to develop habits, and then principles, of behaviour, which come to constitute one's conscience.^[82]
Some scholars have perceived a conflict between The Theory of Moral Sentiments and The Wealth of Nations; the former emphasises sympathy for others, while the latter focuses on the role of self-interest.^[83] In recent years, however, some scholars^[84][85][86] of Smith's work have argued that no contradiction exists. They claim that in The Theory of Moral Sentiments, Smith develops a theory of psychology in which individuals seek the approval of the "impartial spectator" as a result of a natural desire to have outside observers sympathise with their sentiments. Rather than viewing The Theory of Moral Sentiments and The Wealth of Nations as presenting incompatible views of human nature, some Smith scholars regard the works as emphasising different aspects of human nature that vary depending on the situation. In the first part – The Theory of Moral Sentiments – he laid down the foundation of his vision of humanity and society. In the second – The Wealth of Nations – he elaborated on the virtue of prudence, which for him meant the relations between people in the private sphere of the economy. It was his plan to further elaborate on the virtue of justice in the third book.^[87] Otteson argues that both books are Newtonian in their methodology and deploy a similar "market model" for explaining the creation and development of large-scale human social orders, including morality, economics, as well as language.^[88] Ekelund and Hebert offer a differing view, observing that self-interest is present in both works and that "in the former, sympathy is the moral faculty that holds self-interest in check, whereas in the latter, competition is the economic faculty that restrains self-interest."^[89]