Human Flourishing and the Wealth of Nations : Adam Smith on Character Development and Institutional Design

Abstract

Students of Adam Smith’s views on virtue typically look to The Theory of Moral Sentiments . But in fact, the Wealth of Nations contains a strikingly robust theory of the relationship between virtues and institutions, one centered on the question of how the incentive systems created by various institutional structures encourage or impede the moral development of both individuals and societies. This essay documents this underappreciated approach and aims to demonstrate its ubiquity in the Wealth of Nations across multiple institutional contexts.