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Adam Smith on What Is Wrong with Economic Inequality

Published online by Cambridge University Press:  05 May 2016

DENNIS C. RASMUSSEN
DENNIS C. RASMUSSEN*
Affiliation:
Tufts University
*
Dennis C. Rasmussen is Associate Professor, Department of Political Science, Tufts University (dennis.rasmussen@tufts.edu).
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Abstract

This article explores Adam Smith's attitude toward economic inequality, as distinct from the problem of poverty, and argues that he regarded it as a double-edged sword. On the one hand, as has often been recognized, Smith saw a high degree of economic inequality as an inevitable result of a flourishing commercial society, and he considered a certain amount of such inequality to be positively useful as a means of encouraging productivity and bolstering political stability. On the other hand, it has seldom been noticed that Smith also expressed deep worries about some of the other effects of extreme economic inequality—worries that are, moreover, interestingly different from those that dominate contemporary discourse. In Smith's view, extreme economic inequality leads people to sympathize more fully and readily with the rich than the poor, and this distortion in our sympathies in turn undermines both morality and happiness.

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Type
Research Article
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American Political Science Review , Volume 110 , Issue 2 , May 2016 , pp. 342 - 352
Copyright
Copyright © American Political Science Association 2016 

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