ABSTRACT
The shift from exogenous (divine) explanation of society to endogenous ones typified the revolution of the Enlightenment. Society, accordingly, is the product of individuals’ rational interests. But the same must apply to ethics. The innovative part of Smith’s ethics is that he treats ethics as a social theory and applies to it the same reasoning he applies to economic analysis. This form of reasoning is a special mix of an empiricist-evolutionary approach combined with deductive reasoning. Consequently, Smith’s ethics is not really about what is or is not morally good or right. Instead, it is about how these concepts are being formed endogenously in society, which means that they are also susceptible to changing circumstances. Extrapolating from the way people form their moral opinion, Smith constructs the rationalist part of his model – the impartial spectator – which resembles Kant’s categorical imperative. However, in reality, human character and circumstances interfere with the way people judge. It may also lead to a corruption of moral sentiments. One aspect of such corruption is the naturally built-in interchangeability between sympathy and utility (in the sense of the beauty of well-contrived systems). The immediate outcome suggests that in the world of economic interactions, self-interested people may deem natural liberty as morally good for all the reasons an informed observer will judge as wrong. Thus, Smith’s contribution is a theory of relative morality that may explain not only social evolution but also the way it affects morality.
