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I would like to draw attention to the psychological ambivalences in both Smith's and
Marx's theories of economic motivation.
 
I would say that Smith made a clear distinction between self-interest and selfishness,
though more directly in his earlier _Theory of Moral Sentiments_ than in _Wealth of
Nations_, where he took pains to legitimize the prudential self-love by which people
provide for their own wants. The difference--and tensions--between self-interest and
selfishness does appear in WN. The invisible hand represents Smith's optimistic scenario,
grounded in a "natural propensity to truck and barter" in the pursuit of self-interest,
but he also spends considerable energy in criticizing various types of combination, which
others have cited in this thread, in which selfish attempts to gain advantage thwart the
development of trade and wealth, the Mercantile policies he is attacking being a chief
case in point.
 
The motivation for combination, however, is also natural to humans in Smith's view, which
the mentions of power in this thread have referenced. I think there has been a tendency to
promote Smith's optimistic scenario while minimizing or avoiding the pessimistic
possibilities he raises. Unintended consequences, in other words, *might* be beneficial
(in the optimistic scenario), but they *might not*, if the pessimistic scenario were to
prevail.  (Emma Rothschild has a useful discussion of unintended consequences in "The
Bloody and Invisible Hand," chapter five in _Economics Sentiments_.)
 
I would say that the difference between Smith and Marx lies in their opposite views of the
relationship between the individual and her society: for Smith, individuals are socialized
into appropriate behavior. This doesn't necessarily mean that individuals are inherently
bad, but that the development of consideration for others is an outcome of social
interaction through the dynamic interaction of a desire for approval and sympathy.
Unsocialized individuals do run the risk of being selfish in an unredeemed way, though
it's also possible that individuals can be fooled by vanity in desiring to better
themselves to gain more admiration. The first case was more of a potential problem for
Smith, one to be handled by rules of justice, than the latter, which would contribute
productively to the increase of wealth as long as it did not contravene the laws of
justice.
 
Marx, on the other hand, is more like Rousseau in holding to a natural human goodness that
becomes corrupted by society. The great change wrought by capitalism was that traditional
venues of corruption like  vanity in social rank gave way before the impersonal and
pitiless cash nexus. Marx's view, if I can put it in the terms I used above about Smith,
is that the pessimistic scenario of capitalists combining to corner power completely
overwhelmed the possibility of Smith's optimistic "system of natural liberty," creating a
situation that could only be put right by a revolution to establish different laws of
property. Both argued for justice, but for very different senses of justice.
 
The ambivalence in Smith is the tension between the optimistic system of natural liberty
and the (equally natural) pessimistic scenario of the selfish pursuit of power. The
ambivalence in Marx is the susceptibility to social corruption that is redeemed by
social/political action.  No wonder that a change in consciousness was necessary for Marx!
But that is perhaps matched by Smith's desire that individuals grow a conscience, which is
in itself a change in consciousness, yes?
 
 
Paul Turpin 
University of Nevada, Las Vegas 
 
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