A Critical Analysis of Amartya Sen and Adam Smith’s Views on Moral Philosophy and Political Affairs with Emphasis on the Theory of Moral Sentiments

Extended Abstract
 
Introduction and Objectives: Adam Smith, the founder of the classical orthodox school, authored two enduring works: The Wealth of Nations (1776) and The Theory of Moral Sentiments. Despite the importance of both, economists and educational systems in economics have predominantly focused on The Wealth of Nations, while the latter—addressing the moral, philosophical, psychological, and legal foundations of human behavior—has received far less attention. This neglect has led to the omission of key concepts such as sympathy, altruism, impartiality, and justice from economic education and practice, though these could form the very basis of human decision-making and action.
Amartya Sen’s introduction to the classic edition of The Theory of Moral Sentiments centers on the place of moral feelings in Smith’s economic, moral, and political thought, raising four key themes: rationality, the plurality of human motivations, the integration of ethics and economics, and the role of institutions and the free market. Sen defends the coherence between Smith’s two major works, arguing that perceived contradictions stem from neglecting Smith’s moral foundations. We argue that if The Wealth of Nations had been written explicitly upon the moral framework established in this earlier work, many of the shortcomings and criticisms directed at it as the cornerstone of modern economics might never have arisen.
This study aims to critically analyze the perspectives of Amartya Sen and Adam Smith and to reveal the shared methodological error underlying major schools of economic thought over the past two centuries—an error rooted in faulty assumptions about human nature. The study’s theoretical framework focuses on Smith’s key moral concepts such as virtue, justice, sympathy, and impartiality, providing a basis for rethinking the relationship between ethics and economics. This rethinking is not only essential for reforming economics education but could also redirect economic policymaking toward justice, sustainability, and genuine independence. Moreover, revisiting these concepts could help develop contextually adapted models consistent with societies’ cultural and moral values.
Methodologically, this research employs documentary and comparative analysis. The two major works of Smith—The Wealth of Nations and The Theory of Moral Sentiments—were examined directly through the original texts and reliable translations. This included structural analysis, identification of key concepts, and comparison of their application across the two works. Sen’s introduction served as a primary source for extracting his four analytical themes, which were then compared with Smith’s content. Furthermore, the shared methodological error across various schools of economic thought—from classical and neoclassical to Austrian, German historical, institutionalist, and Marxist—was identified and critiqued. This error largely stems from misunderstanding human nature and will, and neglecting the moral capacities of human beings. Complementary sources such as works by Commons, Veblen, Mitchell, and North, as well as relevant philosophical and religious texts, were consulted. Analyses were conducted within a five-dimensional framework (philosophical, psychological, methodological, legal, and ethical) to systematically reveal the interrelation between economic theory and its moral underpinnings. This approach enabled not only a critique of Sen’s interpretations but also a reconstruction of the genuine moral foundation in Smith’s economic thought. Comparative analysis of historical and contemporary examples was also undertaken to examine the practical applications of these concepts in economic policymaking. Countries that have achieved sustainable growth by relying on moral principles and effective institutions were studied, illustrating that the integration of morality and economics is not only possible but demonstrably effective.
Findings reveal that contrary to popular belief, Smith’s two works are not contradictory but rather profoundly coherent: The Wealth of Nations, in its entirety, aligns with the moral foundations of The Theory of Moral Sentiments. Smith emphasizes the necessity of justice and rule of law even in the absence of benevolent virtues and defines impartiality as a fundamental marker of human identity. Comparison of Sen’s four analytical pillars with Smith’s works indicates that neglecting the plurality of human motivations and reducing rationality to mere profit-seeking has led to distortions in economic teaching and policymaking. Furthermore, both historical and contemporary evidence—including the experience of East Asian economies—demonstrate that adherence to Smith’s moral principles can foster economic independence and sustainable welfare. The critique of methodological errors among economic schools further shows that flawed assumptions about human nature have resulted in Darwinian and materialist tendencies that ignore human moral and volitional capacities. These findings underscore the pressing need to revisit the moral foundations of economics and to re-establish an ethics-centered theoretical framework. Empirical analysis confirms that integrating moral principles into policy design can reduce inequality, increase social trust, and promote economic sustainability. Altogether, these results provide strong evidence for re-examining economics education and practice, suggesting that morality can serve as a lasting competitive advantage in the global economy.
The study concludes that returning to the ethical foundations advocated by Smith—particularly the virtues of justice, empathy, and impartiality—can provide a coherent framework for reforming both economic education and practice. Such a reform requires revisiting the fundamental assumptions of economic schools and embracing a more elevated conception of rationality aimed at enhancing human dignity and achieving social justice. Neglect of these principles has not only led to ineffective economic policies but also to the erosion of human identity and structural dependency. It is recommended that economics curricula, especially at the graduate level, incorporate the moral-philosophical dimensions of Smith’s original works and other thinkers who engage deeply with ethical foundations rather than superficial analysis, in order to rebuild economics upon sound moral bases. Likewise, policymakers should learn from countries that have achieved economic independence by integrating moral principles and efficient institutions. Through such methodological reorientation, divine moral principles can serve as the foundation for constructing resilient economies. Ultimately, the study emphasizes that economic development cannot be reformed without reconnecting ethics and economics—this reassessment is both a scientific and practical necessity for the future of the discipline. Such a reconnection can yield an economic system that is not only efficient but also just and humane—one capable of greater resilience in the face of social and economic crises and more conducive to sustainable development. Moreover, a return to ethical principles can rebuild public trust in economic institutions and strengthen social capital. The authors express gratitude to the professors and researchers whose critiques and suggestions enriched this study.