The Two Faces of Adam Smith

  title={The Two Faces of Adam Smith},
  author={Vernon L. Smith},
  journal={Southern Economic Journal},
  • Vernon L. Smith
  • Published 1998
  • Economics
  • Southern Economic Journal
  • Adam Smith’s two major works are based on apparently contradictory themes in human nature: noncooperative self-interest and other-regarding sympathy. These views are not contradictory if we distinguish impersonal market exchange and personal exchange. Noncooperative behavior in the former maximizes the gains from exchange, the basis of specialization and wealth creation. Cooperative behavior in personal exchange is based on reciprocity—trading gifts, favors, and assistance across time—which… CONTINUE READING

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