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Ethical Maturity and Economic Progress: Adam Smith’s Lesson Still Applies

Art Carden, Greg Caskey, Jennings Marshall


As Vernon Smith argued, “markets economize on the need for virtue, but do not eliminate it.” The need for a virtuous, ethically mature citizenry is an important but often-overlooked theme in Adam Smith. Unethical business behavior creates a demand for government regulation ostensibly to fix the problem; however, evidence that government regulation reduces economic growth suggests that this does not so much solve the old problem as it creates new ones. Using what we know about “rational irrationality” and people’s views on government, we explain why unethical business behavior leads to a higher demand for government intervention and why that intervention is not likely to create a more ethically mature society.

Art Carden, Greg Caskey, and Jennings Marshall, "Ethical Maturity and Economic Progress: Adam Smith’s Lesson Still Applies," Journal of Markets & Morality 23, no. 1 (2020): 45-59.

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