Adam Smith On Morality And Self-Interest
Ethics are fundamental rule, principal and moral value to judge what is right or wrong and good or bad. It is social accepted behaviour pattern to make a rational judgement based on basic framework. To gain social protection, ethical voluntary code of conduct is applied. Ethics are generated in situation where proper coordination between action in different circumstances and emotions is necessary. This essay will elucidate about the viewpoints of Adam smith, who is father of modern economy. Adam smith was an ethical business person who utilised his rational and logical thinking to pursue the opportunity and tackle threats and challenges in business sector. The three section of relation between moral and self interest of Smith’ life will be discussed precisely in upcoming paragraph.
In privatisation era, Adam Smith is most recognizable financial analyst, and protector of the free-showcase economy because every individual tries to accomplish self interest in free market economy. In maiden part, Smith emphasised on bogus partition between self interest and morality because he proved that with the assist of self interest, considering and doing about the welfare of social and nation is conducive. He believed that society plays crucial role to run any business. Business should be conduct by incorporating mutual avail of community and individual interest. Nowadays most companies involve in cooperate social responsibility in which they try to fulfill obligation towards their society in which business operates, it is part of Adam smith philosophy. He argued that public benefits are relied on private owners but ethical implication in commercial sector is hard to continue. WN and TNS were two books of Smith, first focused on self centred approach and second one was influenced by moral values. in both books, the first problem was about the thesis and second problem about the concept was not opposing because it was looking the same of both books. Idea of self interest was explained in both books in positive manner, but it was always analysed by other authors in negative manners as a vice, so it was contradicting. In TNS book, he used moral psychological technique of sympathy to elaborate self interest which leads to ethical decision making, herby it was seeming a fake relation. It was a complicated relation between sympathy and self interest, so it was not worthwhile business ethics and looking artificial approach.
Second part is that Smith’s moral way to deal with financial matters seems to be fit but qualified resistance of business society for its commitments to success, equity, and opportunity. Smith prioritised achievement and opportunity-oriented approach to succeed the business before their autonomy and prosperity but he was aware about ethical challenges accurately. According to Smith, appropriate social contract is sympathy for gaining morality but for commercial sector, exchanging is ethical platform. He tried to improve commercial society, for this, he made labour groups, property laws and reliance on new stakeholder to make strong business bond. He found that market influence, technical innovations and labour union organisations enhance the productivity and wealth of economy such as in ancient time, price of commodities decreased low than cost of production but with the injection of high labour cost it proved beneficial. There was an ethic behind the producer profit in this idea of Smith. Subsidies, direct taxation and completion controlling policies can provide more advantage to produces but it may be unfair with other sector professionals, so equal treatment is valid in all cases. The main emphasis of Smith terminology was on justice. Political system should regulate the economic system morally without partiality behaviour and envy with any merchants and manufacturers. At same time, reasonable price of goods and appropriate wage rate for workers should be set by the manufacturers. He prioritised the natural system of autonomy which is called lassie faire economy in which every person considers about self interest and it is free from government involvement also. The tremendous freedom should be allowed to merchant to increase competition and decrease involvement of government, it will be contributed to the wealth of nation by improving international relations. He described that commercial society works for their own interest and use their power for exploiting society which relies on business sector such as landowner uses power over tenant, then it emerges a bad evil. In modern time, there is interdependence relation between business sector and subordinates and labour has liberty to work anywhere else according to good working conditions, so it is persuasive approach to fulfill self interest. According to smith, there should be contribution of moral values like satisfaction, equality and independence of its workers and stakeholders by business society, thus concept of self interest and ethical values would be achieved to lead towards the economic and individual success.
The final part of smith moral philosophy concentrates on integrating ethical behaviour within business culture. He studied emotional content to grasp sympathetic concept about how people live satisfied in an organisation. For understanding emotions, firstly, he judged the verbal and non verbal language and effort of people and then he tried to know how spectator feels and reacts on actor expression and finally he analysed the effectiveness of actor’s action is productive or not to understand the situation. Sympathy is called natural human capacity because it is how to perceive, represent and react to critical situation and expectation of another to develop harmonious relationships. Both actor and spectator can understand their roles by replacing them on correspondence situation as people learn in childhood about how other imagine about themselves. It will assist to resolve conflicts in organisation by mutual understanding. Prudence is motivated communication to gain the respect of other. For example, at the time of selecting friends, personality traits, happiness, reputation and health are considered cautiously. Smith considered that how people should take care the other at the time of attending them is called benevolence, it important to show respect and values towards other to feel comfortable in organisation. In understanding, firstly, connections are generated with other to live closely and then mutual understanding are emerged to recognise situational circumstances and mutual traits. To reside comfortably in an organisation, smith thought rationally the deepest aspects of morality and mutual understanding.
In conclusion, perfect combination of morality and self interest is not difficult to accomplish but it is merely concept of ethical behavior applies to treat every stakeholder equally participate in accomplishing own as well as enterprise goal. Smith philosophy developed a new discipline to develop understanding of commercial sector with the injection morality concept. It will be profitable as well as ethical approach for both stakeholders and cooperation because integration of self interest and morality focus on profit maximisation and society welfare and stakeholder satisfaction also.
