The Good Samaritan: A Superb Smithian Economist, But a Poor Benthamite Utilitarian Economist

Abstract

Economists for over two and one half centuries have completely and totally confused and mixed up the Virtue ethics approach of Adam Smith with the Utilitarian ethics approach of Jeremy Bentham. The major snafu concerns the directly conflicting definitions of self interest of Smith and Bentham.

Smith’s definition of self interest is very simple and straight forward in both The Theory of Moral Sentiments and The Wealth of Nations. Self interest is prudent behavior. Prudent behavior is the First Virtue in the four Virtues discussed by Aristotle (Prudence,Temperance,Courage,Justice). T. Aquinas added Faith, Hope, and Charity (Benevolence). Prudence is conduct that is circumspect, involves hard work, and requires dedication, motivation, frugality, parsimony, carefulness, caution, and discipline. The goal of the prudent individual is, in order to make their small business a success over time so as to care for themselves, their families and relatives, financial success. Of course, Prudence is the necessary condition that must be satisfied first before any of the other virtues can be attempted, practiced, or implemented. Maximizing the profits from their small business operations represents prudent behavior because they can satisfy the basic needs of their families, relatives, as well as for themselves.

Self interest for Bentham has nothing to do with the virtue of prudence. Self interest is behavior that creates or leads to the amassing of wealth only for the sake of accumulating wealth. This is why Bentham stated that money was a good proxy to stand in for utility in his rule to Maximize Utility. Thus, Maximize Utility means to accumulate wealth.

Keywords: Smith, Virtue ethics, uncertainty, indeterminate probability, imprecise probability,Benthamite Utilitarianism

JEL Classification: B10, B12, B14, B16, B20, B22