Adam Smith and the Misunderstood Idea of Self-Interest

When people talk about Adam Smith, the so-called “father of capitalism”, they often quote one line from The Wealth of Nations: “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.”

This statement has frequently been invoked to legitimize self-interested conduct in the realms of business, politics, and economics. However, a critical examination of Smith’s writings raises a central scholarly question: did Smith truly intend to promote unrestrained self-interest, or is his conception of self-interest more nuanced and ethically grounded than is often assumed?

To really understand Adam Smith, we have to look beyond The Wealth of Nations, to his earlier work, The Theory of Moral Sentiments(1759). There, we find the full depth of his philosophy and a very different message about what “self-interest” actually means.

The Moral Foundation: The Impartial Spectator

In The Theory of Moral Sentiments, Smith introduces a powerful idea: the impartial spectator. He describes it as an inner voice, a kind of moral conscience, that helps us judge our own behavior as if we were seeing it through someone else's eyes.

“We endeavour to examine our own conduct as we imagine any other fair and impartial spectator would examine it.”— Adam Smith, The Theory of Moral Sentiments

This impartial spectator acts as a moral anchor, helping keep both human behavior and markets in balance. It reminds us that while we pursue our own goals, we should still be accountable to fairness, empathy, and justice.

Self-Interest, Not Selfishness

Smith never denied that people act in their own interest.  But in The Theory of Moral Sentiments, he’s clear: self-interest is not the same as selfishness.

Right from the opening paragraph, he pushes back against the idea that humans are purely self-serving: “How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others…”   Smith understood that humans are complex and capable of sympathy, compassion, and fairness. We seek our own good, but we also care deeply about how our actions affect others. That’s why he wrote: “The man who acts according to the dictates of the impartial spectator will never be guilty of any gross injustice, even from the most pressing motives of self-interest.”  In other words: even when pursuing our own self-interest, we must always be guided by conscience.

The Bridge to The Wealth of Nations

Seventeen years later, when Smith wrote The Wealth of Nations, he did not leave morality behind. Instead, he tried to build on it. The self-interest that motivates the butcher, the brewer, and the baker works only because society is built on moral values.

The free market, in Smith’s view, was not a moral vacuum. It was a social system that depended on trust, fairness, and justice.  The same virtues he championed in The Theory of Moral Sentiments. When those moral foundations erode, markets become exploitative and unstable.

Smith warned in both works that admiring the rich and powerful can damage our sense of right and wrong, making us see greed as a virtue. He believed this kind of corruption threatens not just individuals, but society as a whole. Does that sound familiar?

Why It Matters Today

We’re in an age of widening inequality and policy debates about who deserves what from our society.  From tax cuts to food assistance, Smith’s impartial spectator should still speak powerfully to us.  It asks us to imagine: Would a fair observer approve of our choices?  Would they see justice in policies that cut benefits for the least among us while rewarding those already comfortable?

For Smith, the answer would depend on whether such actions honor the balance between self-interest and moral duty. He reminds us that true prosperity isn’t measured only in wealth, but in our shared sense of justice and humanity.

Final Thought

Adam Smith wrote many important works, and we need to look at them together to truly understand his ideas. The Theory of Moral Sentiments and The Wealth of Nations are two of his most famous books, and he intended tem to be read as a pair. One explains how markets function, while the other shows how people should act within those markets. The invisible hand of the market can only help everyone when it is guided by our conscience, or as Smith called it, the impartial spectator inside each of us.

At Pitchfork Threads, we’re trying to renew this spirit.  Our shirts call out to bring the humanity back into our society from fighting greed to ending hunger, we’re eager for a society who’d be seen in a good light by the impartial spectator.  We’d love it if you could buy one of our shirts and pitch in to help us make the world a more equitable place.  

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### References (APA Style)

Smith, A. (1759). The theory of moral sentiments (6th ed., 1790). London: A. Millar.

Smith, A. (1776). An inquiry into the nature and causes of the wealth of nations. London: W. Strahan and T. Cadell.

Raphael, D. D., & Macfie, A. L. (Eds.). (1976). The theory of moral sentiments (Glasgow Edition of the Works and Correspondence of Adam Smith, Vol. I). Oxford: Clarendon Press.

Haakonssen, K. (2006). The Cambridge Companion to Adam Smith. Cambridge University Press.

Griswold, C. L. (1999). Adam Smith and the Virtues of Enlightenment. Cambridge University Press.