Send us a text Transaction costs provide the key to understanding Adam Smith's complete philosophical system and how his two great works form an integrated whole. • Smith's two essential claims: humans desire to learn proper behavior and have an innate propensity to truck, barter, and exchange • Sympathy in Smith's view means synchronizing feelings with others—not perfect emotional matching but sufficient "concords" for social harmony • Three core principles guide proper behavior: justice (respecting others' person, property, and promises), beneficence (proper use of what's ours), and prudence (sacrificing present comfort for future well-being) • Self-command turns virtuous intentions into actual proper behavior • Four sources of moral judgment: motive, reaction, convention, and consequence • As societies scale up, we move from moral community (acting from love) to moral order (following rules from their utility) • Smith's "Chinese earthquake" example anticipates the modern trolley problem by revealing how moral agency affects our decisions • The "man of system" tries to impose ideal plans without regard for human nature or gradual change • Smith's egalitarian views positioned economics against slavery and hierarchical social structures Also posted, with resources for teaching and learning, at Adam Smith Works , thanks to Amy Willis. If you have questions or comments, or want to suggest a future topic, email the show at
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