Adam Smith’s Economics and the Lectures on Rhetoric and Belles Lettres: The Language of Commerce

Abstract

Under the light of Adam Smith’s Lectures on Rhetoric and Belles Lettres (LRBL), the aim of this paper will be to reinterpret some Smithian economic and moral issues. More precisely, it will try to highlight the relationship between discursive practice and economic reality in apparent simplicity, exchange. According to Smith, the essence and foundation of exchange and commerce lies in language. The departure point of this study will be to examine the dichotomy that he establishes between two main types of discourse: the rhetorical discourse and the didactic discourse.

1 Introduction

Under the light of Adam Smith’s Lectures on Rhetoric and Belles Lettres (LRBL),¹ the aim of this paper will be to reinterpret some Smithian economic and moral issues. More precisely, it will try to highlight the relationship between discursive practice and economic reality in apparent simplicity, exchange. According to Smith, the essence and foundation of exchange and commerce lies in language. The departure point of this study will be to examine the dichotomy that he establishes between two main types of discourse: the rhetorical discourse and the didactic discourse. Didactic discourse is described as aiming at truth whereas rhetorical discourse obeys a strictly instrumental logic: it only aims at reaching an end and persuading by any mean. This distinction can be used to develop a new approach of exchange relations. The rhetorical discourse brings along to the social and human dimension concerning exchange relations to light. The exchange of goods requires an agreement obtained by «higgling and bargaining».² Economics is “political economy” in the sense that in parallel with the relations of men to things, it is a science which studies the relations between men themselves. The supply and demand embody the desires and wants of men. Therefore, this leads us to carry out a detailed study of exchange relationships as moral and persuasion relationships, revealing the «language of exchange ».

First of all, we will study the distinction that Smith established in the LRBL between rhetorical discourse and didactical discourse. That will enable us to define the rhetorical discourse as persuasion science, as compared with the didactical discourse which consists in truth seeking. As he wishes to persuade by all means to reach his ends, the rhetorician «moves away» from truth, hoodwinking and deceiving his audience. He doesn’t impartially treat the topic he studies. He pleads a cause and manipulates his audience. Besides, some scholars³ recently underlined that the famous «natural propensity to truck, barter, and exchange» comes from reason and language, and more particularly from the desire to persuade. It opens up the possibility to treat exchange relations as persuasion, domination, or power relationship and exchange as a bargaining process.⁴ It is the «malevolent nature»⁵ of exchange that we aim at revealing. To persuade someone that it is their interest to exchange at a certain price, every mean is justified, including slyness and cheating, lie and information dissimulation. The example of the butcher is clear: no benevolence brought during an exchange. But does it mean that we are immoral? The question of the morality of exchange relations comes into light. In this second point, we answer the Adam Smith Problem⁶ thanks to a brief examination of some passages of The Theory of Moral Sentiments.⁷ There Smith explicitly mentions the wish to be believed and to be worthy of this trust, in the same way, he previously referred to the longing for praise and the desire to be praise-worthy. In other words, both the moral constraint coming from the impartial and internal spectator on one side, and the public constraint due to the external spectators on the other side, prevent us from using immoral practices in the exchange. We want to preserve our reputation and our consciousness. Economic behavior is neither immoral nor amoral. Following this, the third and last point of our study tries to identify an analogy between the exchange of feelings, opinions, and goods.

It is a reference to the pleasure of mutual sympathy which finds its corollary in the pleasure of persuading. It underlines the social and human (communicative) dimension of exchange. After being for so long forgotten by the neoclassical model, it was rediscovered by contemporary economists. This is essential to understand the key role of sympathy in the process of exchanging goods and it offers an answer to the question of the unity of the Smithian corpus. The virtuous character of economic behavior is shown through an examination of the way commerce fosters prudence, justice, and self-command, three of Smith’s four cardinal virtues.

2 Rhetoric and Exchange

Our starting point is Smith’s claim in the LRBL that there are only two main kinds of discourse. More precisely, «every discourse proposes either barely to relate some fact, or to prove some proposition» (LRBL, i.149). The first kind of discourse is called «narrative» and has to do with the work of the historian, while the second one is used by the orator. The latter is divided by the author into two sorts of discourse, characterized by their method and their aim: the didactic discourse and the rhetorical discourse. Within the didactic discourse «instruction is the main end» thus persuasion is only the «secondary design», whereas in the case of the rhetorical one the main design is persuasion. Rhetorical discourse stands for the individual who «endeavours to persuade us by all means» (ibid.). So, in that case instruction is neglected or considered «only so far as it is subservient to perswasion» (ibid.). In a word, instruction is subordinated to persuasion. Rhetoric is persuasive while didactic is convincing.

Moreover, a debate can be engaged about the impartiality of those different kinds of discourse. We know the importance of this word in Smith’s moral philosophy. Indeed, what Smith underlines is the fact that the rhetorician, contrary to the man who uses a didactical discourse, is not an impartial “judge” of the topics he works on. In other words, the rhetorician presents a partial point of view about the question he is asked. He defends a cause, with no respect for truth:

The former (the didactical discourse) proposes to put before us the arguments on both sides of the question giving each its proper degree of influence, and has it in view to perswade no farther than the arguments themselves appear convincing. The Rhetoricall again endeavours by all means to perswade us; and for this purpose it magnifies all the arguments on the one side and diminished or conceals those that might be brought on the side contrary to that which it is designed that we should favour.

(LRBL, i.149; italics added)

Thus, the rhetorician pleads a cause. Ready to persuade by all means, he doesn’t look for truth or for fairness anymore. He conceals or minimizes every fact and argument which contradicts his preconception while magnifying the ones which can legitimate his cause. Moreover, he “plays” with people’s feelings, sentiments, and passions,⁸ while the didactic thinker addresses their reason only. Being voluntarily unable of impartiality, the rhetorician seems morally condemnable or, at least, seems unworthy of praise. Didactic discourse attempts to give a fair representation of all sides of the issue rather than just the one-sided partial presentation of the rhetorical kind. This binary opposition is reminiscent of the one settled in Plato’s Gorgias between philosophy and rhetoric where the latter is compared unfavorably with the former on the grounds that rhetoric aims at satisfying personal ends and at conquering power, while philosophy’s quest is intended to reach wisdom and the Good. Rhetoric is seen as an art of pleasure and flattery whose end is persuasion. Philosophy’s end, by contrast, is to find truth.⁹

As a result, Smith’s LRBL are mainly aimed at exploring the communication of ideas. It is to be seen as part of Smith’s system and as a fruitful text for exploring moral and economic issues in particular. With an eye on the latter, it is possible to create a “bridge” between discourse and exchange, to cast a light on the «language of exchange ». Understanding the “chains” unifying rhetorical discourse and exchange relationships requires investigating the foundation of the division of labor and the «propensity to truck, barter and exchange». In the WN, Smith explains that the division of labor «is the necessary, though very slow and gradual consequence of a certain propensity in human nature…the propensity to truck, barter, and exchange one thing for another» (WN, i.ii.1). This natural propensity to exchange is a typically human attribute¹⁰ because «nobody ever saw a dog make a fair and deliberate exchange of one bone for another with another dog» (WN, i.ii.2). What is interesting here is that Smith does not mention the origin of this natural propensity to exchange. He hardly suggests that it is probably «the consequence of the faculty of reason and speech» (ibid.). It is no surprise, for in WN Smith is not concerned with first principles. To him, reason and language are «intimately» linked. He sees language as «a natural expression of our thoughts»—LJ(a), ii.54—, contrary to writing. Besides, the example of the two savages who invent the first words in order to make their desires and wants mutually intelligible¹¹ in the Considerations concerning the first formation of languages reveals how the beginning of commerce cannot be separated from the invention of language. More generally, in the LRBL, Smith adds that Prose is the language of commerce (whereas Poetry is the language of pleasure and entertainment).¹² As a consequence, the development of commerce allows and requires the improvement of language.¹³ However, it is in the LJ that we will find the real explanation of the foundation of the exchange and the division of labor:

If we should enquire into the principle in the human mind on which this disposition of trucking is founded, it is clearly the naturall inclination every one has to persuade. The offering of a shilling, which to us appears to have so plain and simple a meaning, is in reality offering an argument to persuade one to do so and so as it is for his interest. Men always endeavour to persuade others to be of their opinion even when the matter is of no consequence to them. If one advances any thing concerning China or the more distant moon which contradicts what you imagine to be true, you im- mediately try to persuade him to alter his opinion. And in this manner every one is practising oratory on others thro the whole of his life. You are uneasy whenever one differs from you, and you endeavour to persuade him to be of your mind; or if you do not it is a certain degree of self command, and to this every one is breeding thro their whole lives. In this manner they acquire a certain dexterity and address in man- aging their affairs, or in other words in managing of men; and this is altogether the practise of every man in the most ordinary affairs. This being the constant employment or trade of every man, in the same manner as the artisans invent simple methods of doing their work, so will each one here endeavour to do this work in the simplest manner. That is bartering, by which they address themselves to the self interest of the person and seldom fail immediately to gain their end.

(LJ(a), vi.57)

So, exchange is founded on this «desire of persuading, of leading and directing other people», which «seems to be one of the strongest of all our natural desires. It is, perhaps, the instinct upon which is founded the faculty of speech, the characteristical faculty of human nature» (TMS, vii.iv.25). The individuals who carry out an exchange may now be conceived as rhetoricians, and the exchange as a bargaining process. We are able to explain why the natural propensity to truck, barter, and exchange is a human characteristic. It is founded on the desire to persuade which is itself a desire of approbation, more precisely a desire of approbation in relation to our opinions and ideas. Rhetoric is the foundation of human life. We have a strong desire to persuade because we need others if we want to satisfy our desires and our needs.

Unlike animals, human beings are fundamentally dependent on others’ assistance for their survival.¹⁴ That’s why they are endowed with the faculty of speech in order to persuade them to do what they need. For it is «by treaty, by barter, and by purchase, that we obtain from one another the greater part of those mutual good offices which we stand in need of» (WN, i.ii.3). We practice oratory through all of our lives, and «the offering of a shilling, which to us appears to have so plain and simple a meaning, is in reality offering an argument to persuade one to do so»: LJ(a), vi.57. Furthering this point, we approve of others’ opinions in the same way we approve of their moral sentiments, by sympathizing. The desire of approbation comes from the pleasure of mutual sympathy.¹⁵ And sympathy is typically a human attribute and the key to the social nature of Man. A second explanation is explicitly given by Smith in the passage mentioned below. The propensity to truck is founded on the desire to persuade and «this is the instinct upon which is founded the faculty of speech, a characteristical faculty of human nature». The use of the expressions «faculty of speech» and «reason and speech» leads us to believe that what Smith has in mind here is not language in a narrow sense but rather the Aristotelian logos, the power of reasoning and expressing one’s ideas. So, persuasion, language, and exchange are inseparable. Men possess an innate desire to persuade; so they spend their whole life exercising their power of persuasion. In the eighteenth century, the word “commerce” had a broader sense than today. It meant diffusion, communication, propagation.¹⁶ It was not restricted to economic relationships. That’s why we can say that throughout his works, Smith describes Man as a «commercial» or an «exchanging animal». He exchanges words and ideas in the LRBL and the Considerations concerning the first formation of languages, feelings, and moral sentiments in the TMS, and goods in the WN. Moreover, there is a pleasure in persuading in the same manner, there is a pleasure in mutual sympathy.¹⁷ Finally, persuasion is an end in itself for Smith. We exchange goods not only for the goods themselves but in order to persuade others and obtain this pleasure of persuading, even if we know we are mistaking.¹⁸

3 The Morality of Exchange

Defining people engaged in the exchange of goods as rhetoricians provide us with significant clues to understand their behavior in the marketplace. A rhetorician is one who pleads a cause and whose primary design is to persuade by every means. Economic agents plead their cause too. They try to satisfy their personal interest. If we compare them with rhetoricians, does it mean that they will endeavor to satisfy their own interest by every means? The “selfish” character of the economic man seems to find some textual support.¹⁹ Rhetorical discourse and power are intrinsically linked, the rhetorical discourse being at the beginning the science of men aspiring to political power,²⁰ Smith explicitly defines the faculty of speech and the desire of persuading as useful instruments for governing men.²¹ As a consequence, exchange relationships become power and domination relationships. It is interesting to notice that Smith describes a «learning process». In other words, the individuals who are often persuaded, led, and directed because of their lack of rhetorical ability will not remain infinitely dominated by others since «from being led and directed by other people we learn to wish to become ourselves leaders and directors» (TMS, vii.iv.24). The traditional presentation of exchange as a mutually beneficial process is called into question. This malevolent side of exchange is concealed by the fact that exchange is built on an agreement and based on this principle: «Give me that which I want, and you shall have this which you want» (WN, i.ii.2). The most important point is that the individual who dominates does not let his (or her) superiority appear and that he manages to give the other one the impression he is not dominated. It mainly consists of making believe²² the other one that it is his interest to exchange, without knowing if it is really the case.

What matters is only to persuade²³ in order to reach one’s ends. Rhetorical discourse aims at persuading by all means. This being so, to cheat, to lie, to mislead, or to hide information become means to persuade someone, creating what we call today asymmetric information. The language of exchange is not a language of truth.²⁴ Rhetoric is a source of power: the power of directing, manipulating others’ minds. It reveals the absolute power of language to govern Men.

As a consequence, the question of the morality of exchange relationships is asked. In a “scholastic” perspective, when someone hoodwinks and deceives or “hides” any fundamental information, the exchange resulting from the bargaining is morally condemnable.²⁵ Along the same line, it seems possible to point out a moral condemnation of exchange relationships inside a strictly Smithian body of theory. Indeed, in the manner of the rhetorician, the individual performing an exchange, aiming solely at his personal gain, adopts a partial point of view on the exchange situation. He will naturally defend his cause, leaving aside any information which could be unfavorable to him while highlighting and magnifying every argument which serves him. Contrary to the historian, he is not «an impartial narrator of facts»,²⁶ he pleads a cause. Being unable of impartiality, the individual who exchanges using lie and cheat may be morally condemnable for he or she would not get the approbation of the impartial spectator. In other words, he would not be worthy of being believed. Here comes the spectrum of the Adam Smith Problem²⁷: Do we have in Smith’s economic treatise people who are immoral? Do they keep a proper, respectable, and virtuous degree of self-love or is human nature essentially selfish? To answer this question, we have to keep in mind that for Smith, man is a social being who wants nothing else than being looked at, loved and admired by his fellow citizens.²⁸ But he does not only look for praise contrary to what Mandeville or La Rochefoucauld asserted in their «licentious systems» (TMS, vii.ii.4.7). They are condemned for being pernicious because they destroy the distinction between vice and virtue (TMS, vii.ii.4.6).

In opposition with them, Smith claims that men would be mortified if they were praised without being praise-worthy. According to Smith, the desire of approbation is one of the strongest of our desires. Two different tribunals will judge our conduct: the external spectators and the internal one. The actual spectators may be misleading because they can be manipulated (by rhetoricians) in their passions and sentiments. The role of the impartial spectator is precisely to correct the imperfection of their judgments²⁹ by looking at ourselves as if we were an external observer of the scene. The judgment on our own conduct is based on the same principle that when we judge the conduct of another man. We approve of our own conduct when, placing ourselves in the situation of another and view it «with his eyes and from his station», we can enter into and sympathize with the sentiments and motives which influenced it. This is the voice of reason, of man’s conscience. Two modes of approbation are presented to us. On one side, there is the social approbation, or the approbation of others. On the other hand, we find our own, inner approbation, or the approbation of the impartial spectator. The latter constitutes a higher tribunal, representing the ethical standard. When we get the approbation of the impartial spectator, we can be «more indifferent about the applause, and, in some measure, despise the censure of the world; secure that, however misunderstood or misrepresented, we are the natural and proper objects of approbation» (TMS, iii.i.5). The social standard is explicitly associated with misrepresentations and misunderstanding while that of the impartial spectator comes along with virtue and deserves love and reward (TMS, iii.i.6). Working from this point, he develops the seminal role of conscience in our lives by asserting that man has a natural desire, not only to be praised, but to be praise-worthy. The consciousness of being praise-worthy compensates for the lack of actual praise. The approbation of the inner tribunal is a consolation for men’s erroneous judgments. Very generally, Smith’s point is that we must discern actual from deserved praise, the latter. For «the most sincere praise can give little pleasure when it can- not be considered as some sort of proof of praise-worthiness» (TMS, iii.2.4) being much superior to the former as it is the nearest approximation of the truth of moral judgment.³⁰ Is there a correspondence between the two modes of discourse and the two modes of moral judgment? We come close of the answer when he explains that in the same way as we desire to be praised and to be praise-worthy, we crave to be believed and to be worthy of being so:

so we cannot always be satisfied merely with being believed, unless we are at the same time conscious that we are really worthy of belief… It is always mortifying not to be believed, and it is doubly so when we suspect that it is because we are supposed to be unworthy of belief and capable of seriously and wilfully deceiving. To tell a man that he lies, is of all affronts the most mortal.

(TMS, vii.iv.24–26)

The duality of moral judgments is reflected in the realm of intellectual judgments. There is a striking analogy between the exchange of sentiments and the exchange of opinions. Being believed means nothing else than being approved in our ideas by real spectators. On the other hand, following Smith’s concept of praiseworthiness we argue that being worthy of belief has to do with the approbation of the impartial spectator. Smith’s theory of the communication of ideas is to be found in his LRBL. That’s why, we claim, his dichotomy of the two kinds of discourse can be used to understand these lines. Opinions and ideas are believed when they are approved by actual spectators. While they are worthy of belief as far as the imaginary and ideal spectator approves them. Persuasion is opposed to conviction, the rhetoric to the didactic discourse. The end of the rhetorician is to be believed, even though he is wrong, to get the pleasure of persuading. For «if a person asserts anything about the moon, tho’it should not be true, he will find a kind of uneasiness in being contradicted, and would be very glad that the person he is endeavouring to perswade should be of the same of thinking with himself»: LJ(b), 222–223.

His aesthetical pleasure, as will be shown below, lies in the beauty of the harmony of minds. His language is partial and deceitful. The didactic thinker, by contrast, strives for truth. He is worthy of belief because his opinions are the nearest approximation of the truth of intellectual judgments. His language is just and impartial. He displays arguments on both sides of the issue, giving each of them its proper weight.

He is an impartial spectator of his topic and represents the figure of the judge, as opposed to the rhetorician which personifies that of the advocate. The didactic discourse is that of the virtuous man whose tranquility of mind reflects the pleasure of inner approbation. He is endowed with enough self-command to resist the natural temptation of desiring to persuade in every circumstances.³¹

With this in mind, what can be said about the morality of people involved in exchanging goods? How can we transpose these considerations to the market? Reputation (the external, public constraint) and merit (the internal, personal constraint) are central features of social and economic lives within which confidence arises from «frankness and openness» (TMS, vii.iv.28). These two kinds of constraints (sociality and consciousness) explain why probity³² is a distinctive virtue of commercial societies and why the economic exchange is globally “immunized” against immoral practices. In other words, the individuals carrying out exchange are not selfish but self-interested: they respect the rules of justice because they respect each other and themselves. It makes them trusted and trustworthy. While trust is to be considered as the result of the approbation of our ideas, that is, of rhetorical discourses, trustworthiness is to be seen as the consequence of men’s use of didactic discourses. For someone trustworthy is, to use our analogy, worthy of belief and praise. Consequently, the probity of men in commercial societies is a consequence of their use of didactic discourses in social intercourse. They are deeply concerned with their honor (the internal spectator) and their reputation (the external spectators). People want to be approved, and to be worthy of approval. They are naturally led from the use of rhetorical discourses to the use of didactic discourses. What does it mean for market process?

Both free competition and consumer’s satisfaction will compel merchants to use didactic discourses, that is, to sell commodities at their “true” price. For if one of them deceives the buyers (the goods are of much inferior quality that was claimed, or they are cheaper elsewhere while it had been refuted) in order to persuade them to buy his products, he will immediately be “sanctioned” by the market. Disappointed consumers will choose another seller.

Probity, Smith underlines, comes from the merchant’s regard for his own interest. Anxious of «losing his character», he is «scrupulous in observing every engagement». For «when a person makes perhaps 20 contracts in a day, he cannot gain so much by endeavouring to impose on his neighbours, as the very appearance of a cheat would make him lose»: LJ(b), 327.

The frequency of dealings is crucial here. When people seldom deal with one another, their reputation is not threatened. There Smith contrasts public with private life. Politician are said to be «somewhat dis- posed to cheat, because they can gain more by a smart trick than they can lose by the injury which it does their character» (ibidem). In opposition with them, «a prudent dealer, who is sensible of his real interest, would rather chuse to lose what he has a right to than give any ground for suspicion.»: LJ(b), 328. If merchants want to be approved, they need to be honest. The fairness in exchange is the natural consequence of man’s sociability, consciousness, and independence in commercial societies.³³

Animated by a moderate self-love, people are prudent³⁴ and hence, praise-worthy (TMS, vii.ii.3.16).

For prudence³⁵ is entirely approved by the impartial spectator.³⁶ That’s why commerce is among men as among nations mutually beneficial:

A free commerce on a fair consideration must appear to be advantageous on both sides. We see that it must be so betwixt individualls, unless one of them be fool and makes a bargain plainly ruinous; but betwixt prudent men it must always be advantageous. For the very cause of the exchange must be that you need my goods more than I need them, and that I need yours more than you do yourself; and if the bargain be man- aged with ordinary prudence it must be profitable on both. It is the same thing with regard to nations.

(LJ(a), vi.160; my emphasis)

This quote makes an explicit link between commerce and virtue. For people must be prudent for trades to be mutually beneficial. Dogs never make «fair and deliberate»³⁷ exchanges but humans do. To conclude, we don’t face the Adam Smith Problem. The man of the TMS and the man of the WN are a one and only person. Economic behavior is deeply rooted in human nature and fosters cardinal virtues such as prudence and justice.

4 Sympathy and Exchange

Going further, as Young³⁸ rightly argued we can think that Smith believes economics fits within a broad moral social science. Indeed, his three major works are hierarchically connected and the most important for him is the TMS as it «provides the general theory of human nature and morality which informs the more particular inquiries into law, government and economics… In moving from morality to jurisprudence to political economy he is moving from the general to the particular; from the higher levels of abstraction to the lower. Moral philosophy shades into jurisprudence, which in turn shades into economics».³⁹ Since the last quarter of the twentieth century, many works⁴⁰ have dealt with the idea that the TMS and the WN are consistent and, furthermore, parts of an incomplete system. At the end of the TMS and again in a letter to La Rochefoucauld,⁴¹ Smith himself confessed he intended to provide such a system, including a history of jurisprudence.⁴² Our attempt to recover the unity of Smith’s thought in this work focuses on the compatibility of the TMS and the WN with the LRBL. To this purpose, we study the links between sympathy and exchange. This analysis allows us to shed light on the various, seminal features of exchange. First, it is a process: time matters, we are in a dynamic approach. More precisely, it is a communication process: debating is essential and founded on a common language. Moreover it is a bargaining process: each one is urged by the desire to persuade and uses his (her) rhetorical abilities to reach his (her) ends by putting himself in the place of others and by playing with their feelings and sentiments. More generally, it is fundamentally a human and social process: man is a passion being, he strives to get the approbation of his fellows. Persuasion is the end of communication. Sympathy, we argue, is needed to be successful in communicating our sentiments as well as our opinions. The “commerce of sympathy” pervades economic relationships.

We asserted that exchange relationships are persuasion relationships because the individuals who are in the process of exchanging are rhetoricians. And rhetoric is a kind of discourse.

As a consequence, the exchange involves a discussion process and according to Smith discussion is the very place par excellence to practice sympathy.⁴³

In the TMS discussion is almost synonymous with social life. He explains that we approve the feelings of others in the same way as we approve of their opinions, by an imaginary change in position, namely sympathy: «The great pleasure of conversation and society, besides, arises from a certain correspondence of sentiments and opinions, from a certain harmony of minds» (TMS, vii.iv.27; my emphasis). When doing so, we judge of the propriety or impropriety of the affections or opinions of other men by estimating their concord or dissonance with our own. Passions will appear suitable and proper to their objects if the sympathetic passions of the spectator are keeping with the original passions of the principally concerned person. I will approve of your opinions if I sympathize with them, which is to say if I endorse them because your arguments convinced me.⁴⁴ Man’s social nature naturally leads him to look out for the other’s agreement, for their approbation of his opinions or passions, for the sake of the pleasure residing in harmony. To look for an agreement when exchanging goods is a way to get the approbation of my ideas on the goods (its characteristics and price) and above all to test my power of directing men. As Dellemotte⁴⁵ rightly noticed, we are likely to imagine a strategic use of sympathy within the exchange process.⁴⁶

In the LRBL, Smith explains how the rhetorician, and as a consequence the exchanging individual, plays with people’s feelings, sentiments, and passions to persuade his audience. The diffusion and communication of feelings, passions, and sentiments is achieved through the capacity of sympathy. The idea is to get some information about the person you exchange with. In other words, this is a way to discover his preferences. The more you figure out people’s character and temper, the better you will reach your own ends. In modern, commercial societies, it is paradoxically by “plunging” myself into you that I achieve “my self.”⁴⁷ The repetition of exchanges (social interactions) with the same person (customer, buyer, or seller), or a group of persons you identify thanks to your experience, should allow you to reach more easily agreements (sympathy and approbation) afterwards.

Nonetheless, sympathy is not only an essential component but it is also a prerequisite to the exchange process. Indeed, if people want to discuss, they have to share a common language. This common language allows a mutual comprehension which is fundamental in every coordination issue. Those people have to share common values and knowledge. Thanks to his concepts of sympathy and impartial spectator Smith explains in the TMS this organic or spontaneous genesis of common beliefs and values. Communication is at the core of the emergence of moral values and norms. In this scheme, the impartial spectator may be represented as an internalization of social interactions. He will “memorize” the episodes of approbation and disapprobation. If people sympathized with my affection in a given situation or if they approved of my opinions, I will tend to reproduce this behavior and opinions. If my opinions (my arguments about the qualities of the goods and its price) didn’t convince many spectators (buyers), I will correct it (to cut price) in order to get their approbation (to sell). This is a «self-strengthened» mechanism, a natural, spontaneous, or organic emergence of common values⁴⁸ and knowledge. Moral norms emerge as a result of an unconscious evolutionary process. Commerce is an important not to say fundamental element of social life in modern societies.⁴⁹ The norms prevailing in this sphere are some way the result of the internalization of sympathetic experiences by the impartial spectator. The market is to be seen as the “agora” of modern, commercial societies. There people exchange sentiments and opinions on goods and debate on prices and quantities.

Therefore, we would like to underline the great similarity between the exchange of goods and the exchange of sentiments and passions by briefly defining a model of bilateral exchange of goods. When two individuals try to exchange affections, there is an agent who feels the original passion, and a spectator who tries to sympathize with him and who feels a sympathetic passion. What is important here is the fact that the intensity of the original passion is necessarily higher than the one of the sympathetic passion because sympathy is an imaginary change in positions and an imperfect mechanism. The spectator will never be able to plainly enter in the agent’s character or to exactly know the objects of his passion. However, even if the spectator will never feel the passion of the agent with the same intensity, a “harmony,” a “concord” may be attained thanks to the pleasure of mutual sympathy. By his self-command, the agent will lower the intensity of his passion for the spectator to sympathize with him, while the spectator will increase his own by trying to enter into every circumstance which may have caused the passion. By doing so, they will reach a “propriety point.” Mutual sympathy will then arise. In this “model,” the convergence of feelings is attained through the pleasure of mutual sympathy. That underlines the innate tendency of men to look for the approbation of others. We are convinced that there is here a striking parallel with a bilateral exchange of goods. On the one side, the agent would be a seller who wants to sell at the highest price. On the other side, the spectator would be a buyer, who wants to buy at the lowest price. Once again, a convergence may be attained because there is pleasure in persuading in the same way, there is pleasure in mutual sympathy.⁵⁰ The desire to be believed is a desire of approbation, and to approve of someone’s feelings or opinions means nothing else than sympathizing with them. The buyer and the seller will strive for an agreement in order to get this pleasure and will exchange at what we call a “propriety price.” To reach an agreed valuation, each one has to go beyond his partial and selfish position.

As Kennedy rightly argued, «bargainers must be other-centred, not self-centred».⁵¹ They have to satisfy the other’s self-love if they want to satisfy their own. To reach an outcome agreeable to both, they must contain their self-love, tending toward a position of impartiality. Once more, the market can be seen as a public place in which we are educated to self-command and to impartiality. Let me now briefly describe the process leading to the “propriety price.” Our market is composed of one seller and one buyer. The final outcome will depend on each one’s negotiation or communication power. The price range is defined by a high bound (the buyer’s highest price he wants to pay) and by a low bound (the seller’s minimum price to cover his production costs). Every acceptable price (propriety prices) for both is included into this price range. The buyer will try to take the seller’s place to discover his minimum price. Sympathy is also to be used by the individuals involved in the bargaining process to play with each other’s passions. As a result, if the agreed valuation is nearer from the low bound, it means that the buyer’s communication and negotiation power is stronger than the seller’s one. The buyer will get a greater part of the surplus. From this point, it is possible to imagine a “just” price, distinct from “propriety” prices. Smith is clear that we exchange if and only if our well-being is increased. For «the very cause of the exchange must be that you need my goods more than I need them and that I need yours more than you do yourself»: LJ(a), vi.160. The ideal and just result of the bargaining process is reached, we claim, when the gains are equally divided among the participants, that is, when their respective outcomes are equal. This “just” price is perfectly in the middle of the price range, where every change in price leads to a fall of one’s well-being. In analytical terms, some assumptions are needed to reach that optimal result. One of them was implicit in our reasoning. People involved in the exchange must have equal rhetorical power; otherwise one of them will naturally use his superiority to get the greatest part of the surplus. Doing so, he will come nearer of his “maximizing point,” considered here, if he is the seller (respectively the buyer), as the high (low) bound of the price range. We add that symmetry of positions, or social status, is needed. For people engaged in a subordination relationship will not be prompt to contradict their superiors.⁵² To conclude on this point, the pleasure to exchange is a pleasure to persuade and to get the approbation of someone on our own valuation of the goods. The exchange of goods seems similar to the exchange of sentiments.

An “equilibrium” is reached through a (dynamic) process, restoring order and tranquility thanks to the harmony⁵³ of minds it creates. Going further, we agree with Griswold to claim that the exchange process «is not merely analogous to the process of sympathy described in the TMS: it is built upon it».⁵⁴

However, the link between sympathy and exchange is more complex than it appears at first sight. Indeed, sympathy requires social proximity. It is very difficult to sympathize with someone we don’t know.⁵⁵ With this background in mind, it becomes interesting to reread the famous passage of the butcher, the brewer, and the backer in the WN. Commercial society is defined as one in which every man is a merchant. It means he lives by exchanging the surplus part of the produce of his labor against that of other men. Men become entirely dependent on others for the satisfaction of their needs. What art will they use to get what they want from their fellows? Man, it is said, must work «on the selflove of his fellows, by setting before them a sufficient temptation to get what he wants»: LJ(b), 220. Smith says that the individuals in economic interactions have in mind their own advantage. Why aren’t they assumed to be benevolent? A commonplace argument is that we cannot be benevolent in the marketplace because we are facing strangers. The supposed impersonality of the market is seen as allowing little room for spectator mechanisms to work in this arena. Therefore, this lack of social proximity could lower the importance of sympathy and benevolence in the exchange of goods. Indeed, the more you know people, the better you sympathize with them and the more benevolent you are toward them. Benevolence can be seen as the result of repeated sympathy.⁵⁶ So that we could nonetheless imagine the gradual appearance of benevolence in economic intercourses by the repetition of interactions as the individuals involved would know each other better and better. Besides, Young convincingly argued that sympathy’s effectiveness is more closely tied to physical distance than social distance.⁵⁷ What is seminal to sympathize is to see and to be seen. We are able to sympathize with strangers if we meet face to face.⁵⁸

However, Smith’s plea for self-love in economic interactions is founded on a plain argument. Human nature is much more self-interested than benevolent. Nature has endowed man with a strong love of himself for him to survive. Smith is not weary to repeat that man’s satisfaction of his basic needs would be threatened if it was not so.⁵⁹ When people «address themselves to the self-interest of the person», they «seldom fail immediately to gain their end»: LJ(a), vi.57. Man expects anything from self-love, since it is a much more powerful spring than benevolence.⁶⁰ That’s why he is said to be more successful if he addresses to their self-love. It is no more than the best strategy to persuade them.⁶¹

Our second argument lowering the importance of sympathy in exchange has to do with the “essence” of sympathy. This is a more fundamental objection. We can easily think of a seller trying to make an imaginary, strategic change of position in order to discover what the buyer’s personal interest is. But the specificity of this imaginary change of position comes from the fact that it is the seller’s self-love which motivates him to «take the buyer’s position». It is not, contrary to sympathy, a spontaneous and disinterested change of position.⁶² In the exchange of goods, a distinctive form of sympathy appears: what we call an “interested sympathy.” Using Aristotle’s words, we can say that self-interest undoubtedly is the exchange’s final cause, while its efficient cause is sympathy. In order to satisfy my self-love, I need to know yours. That’s why I have to look at the situation from your point of view. Sympathy and self-interest are not contradictory human motives. By looking at us with the eyes of others, sympathy allows us to understand our interest in a true light. Self-love is a reflexive modality of sympathy.⁶³ We know ourselves only insofar as we can look at ourselves with the eyes of others. Man’s consciousness is deeply rooted in social, sympathetic interactions.

5 Conclusion

The aim of this chapter is to further our understanding of Smith’s conception of economic exchange.

To that end, we decided to identify the language of commerce. Three significant conclusions may be drawn from this analysis. First, the coherence of Smith’s system is emphasized. We went far beyond the traditional combination of his moral and economic treatises to include his lectures on rhetoric, a youth writing whose importance has so far been neglected by historian of economic thought. Together with his later lectures on jurisprudence, they exhibit Smith’s continuity of thought and the fecundity of a great but unfinished intellectual system. As was redundantly shown, the Adam Smith Problem vanishes once we accept to cross the texts. From this point, an analogy between the exchange of sentiments, opinions, and goods was developed so that man may be seen as a “commercial” animal. Smith provides us with a unified conception of human nature which cannot be reduced to the «selfish hypothesis». Here comes our second point. Far from the vision of the Chicago School, where Smith is considered as the founding father of economic science for having identified human nature with self-interest,⁶⁴ we argued that what was seminal in exchange relationships is not man’s autonomy and selfishness. Rather we should look at the passage of the brewer, the baker, and the butcher as one in which people’s concern for others is put into light.⁶⁵ We cannot satisfy ourselves if we do not satisfy others too. Consequently, we have to imagine and to see us as if we were at their place. Only through this process of changing places can we get our true self interest. Self-love is appealed to because it is much more persuasive than benevolence. For we «are not ready to suspect any person of being defective in selfishness» while the same could not be said of benevolence (TMS, vii.ii.3.16). Yet, it is not to say that people in exchange are immoral or even amoral. The virtuous character of the “economic man,” not different from man in general, was underlined through the workings of the duality of moral judgments. Both the social and the ethical constraints create the conditions for a virtuous commerce. Three of Smith’s four cardinal virtues (prudence, justice, and self-command) are met. Impartiality and consciousness are fostered. For Smith, commerce is founded on cooperation, not on conflict.⁶⁶ That’s why commerce «ought to be, among men as among individuals, a bond of union and friendship» (WN, iv.iii.c.9).