4 - Talking to My Butcher

Summary

The Wealth of Nations is a stupendous palace erected upon the granite of self-interest. Thus George Stigler, and thus, with minor qualifications here and there, two centuries of misinterpretation of Adam Smith, especially by economists. To claim that Smith endorses the notion that people should, or inevitably do, act selfishly is severely to misread his text, especially in relation to other theories of human motivation at the time. That misreading arises, especially, from a misunderstanding of the famous “butcher and baker” paragraph in Book I, chapter ii of the Wealth of Nations – a misunderstanding that virtually inverts the true meaning of that paragraph. I explore the paragraph in depth here, commenting on sections of it line by line, so as to bring out what I take to be its overall argument. The result points, among other things, to a deep kinship, as well as certain significant differences, between Smith and Aristotle.