Das Adam Smith Problem

Adam Smith’s book The Wealth of Nations marks its 250th anniversary on March 9, 2026. The occasion is experts revisit the perceived conflict between his two major works, known as Das Adam Smith Problem.

Das Adam Smith Problem:

Dimension	Key Details
Meaning	Das Adam Smith Problem refers to the perceived conflict between Adam Smith’s two major books.
Theory of Moral Sentiments	The Theory of Moral Sentiments, 1759 emphasizes empathy or sympathy in understanding human character and concern for others.
The Wealth of Nations	The Wealth of Nations, 1776 emphasizes self-interest and the role of the invisible hand in the economy.
19th Century View	German thinkers in the 19th century believed that Adam Smith shifted from kindness to selfishness.
Modern View	Modern scholars argue that there is no real conflict between Smith’s economic and moral ideas.
Integrated System	Smith’s ideas on economics and morals are viewed as an integrated system.
Invisible Hand	The invisible hand shows that people may help society while pursuing self-interest, provided good moral rules exist.
Jacob Viner	Jacob Viner argued in the 1920s that both books share the same philosophical base.
Amartya Sen	Amartya Sen argues that Smith’s economics includes moral institutions needed for markets to work.
Kenneth Arrow	Kenneth Arrow argued in the 1950s that Smith moved economic theory beyond good versus bad to study collective market functioning.
Significance	The debate explains the balance between individual interest and public good in the Scottish Enlightenment and welfare economics.
Adam Smith	Adam Smith, 1723–1790, is known as the father of modern economics and a central figure of the Scottish Enlightenment.