II. DESERVED APPROVAL AS THE MOST REPRESENTATIVE KIND OF SELF-LOVE

To lay the ground for discussion of the desire for deserved approval as the motive for exchange in WN, we need to distinguish it from two opposite and extreme kinds of self-love: love of praise and love of self-approval. To this end, we first need to see how Smith in TMS develops a new approach to self-love by criticizing Mandeville.Footnote ⁸

In the first section of TMS, Smith refers to those, like Mandeville, who are “fond of deducing all our sentiments from certain refinements of self-love” (Reference Smith TMS I.i.2.i; emphasis added). For Smith the problem does not lie so much in the fact that Mandeville deduces all sentiments from self-love as that he refines self-love to the point of reducing it to a single desire that embraces every other possible form of it: “Dr. Mandeville considers whatever is done from a sense of propriety, from a regard to what is commendable and praise-worthy, as being done from a love of praise and commendation, or as he calls it from vanity” (Reference Smith TMS VII.ii.4.7). Thus, when Smith finally criticizes Mandeville towards the end of TMS, he defines—as Ryan Hanley (Reference Hanley2009) also argues—three different forms of self-love.Footnote ⁹ These kinds of self-love are described in the following statement, where Smith sets out to explain why, unlike Mandeville, he believes that “self-love may frequently be a virtuous motive of action” (Reference Smith TMS VII.ii.4.8; emphasis added): “I shall only endeavour to show that the desire of doing what is honourable and noble, of rendering ourselves the proper objects of esteem and approbation, cannot with any propriety be called vanity. Even the love of well-grounded fame and reputation, the desire of acquiring esteem by what is really estimable, does not deserve that name” (Reference Smith TMS VII.ii.4.8).

The former kind of self-love is vanity (or love of praise): “the frivolous desire of praise at any rate” (Reference Smith TMS VII.ii.4.9), that is, the Mandevillian desire to gain the approval of the others. The latter is love of virtue (or love of praiseworthiness): “the desire of rendering ourselves the proper object of honour and esteem; or of becoming what is honourable and estimable” (Reference Smith TMS VII.ii.4.9), that is, the desire to achieve self-approbation.Footnote ¹⁰ The third kind of self-love is love of true glory (or love of deserved praise): “the desire of acquiring honour and esteem by really deserving those sentiments” (Reference Smith TMS VII.ii.4.9), that is, the desire to gain the deserved approval of others.Footnote ¹¹

The difference between vanity and love of virtue, i.e., between love of praise and love of praiseworthiness, is quite evident. In Smith’s terms, the former consists in the pursuit of others’ sympathyFootnote ¹² for its own sake; the latter, in the pursuit of the sympathy of our imaginary impartial spectator (that is, the impartial judge of ourselves).Footnote ¹³ However, as Smith also points out (Reference Smith TMS VII.ii.4.9–10), this is not the case with the difference between love of true glory and vanity or between love of true glory and love of virtue. This is due to the fact that vanity and love of virtue are diametrically opposed, while love of true glory is midway between them and so contiguous with both. Vanity is different from love of true glory (or deserved approval), because in the latter case the approval of the others needs to be deserved. Love of virtue (or self-approval) is different from love of true glory, because the desire to be the “proper object” of approval does not necessarily imply the desire to “acquire” that approval, as in the latter case. Love of praiseworthiness is the love of being worthy of praise for its own sake, independently of the others’ approval; love of deserved approval, instead, is the love of obtaining the others’ esteem but, unlike vanity, only when it is really deserved. In other words, self-love as vanity means the pursuit of others’ approval without caring about one’s praiseworthiness; self-love as self-approval means the pursuit of the approval of one’s impartial spectator without caring about the others’ approval, while self-love as deserved approval means the pursuit of others’ approval that concords with the approval of one’s impartial spectator. Thus, even if it is correct to highlight—as most commentators do—the difference between love of praise and love of praiseworthiness, we still need to stress their difference from the love of deserved praise, which represents another and specific desire.

Having identified these three kinds of self-love in TMS, it is worth stressing that for Smith, vanity and love of virtue are two opposite and extreme kinds of self-love, limited to an exiguous minority of circumstances or persons. Although all mature persons achieve the capacity for self-judgment, according to Smith only the wisest are at all times able to find satisfaction in their self-approbation alone, without any recognition from others (Reference Smith TMS VII.ii.4.10). At the same time, only the poorest in spirit are most of the time deaf to their impartial spectator and in constant need of the vain approbation of others (Reference Smith TMS VII.ii.4.10; see also Young Reference Young1997, p. 47; Fleischacker Reference Fleischacker2004, pp. 104–120; Rasmussen Reference Rasmussen2008, p. 118).

As Smith writes in TMS: “They are the most frivolous and superficial of mankind only who can be much delighted with that praise which they themselves know to be altogether unmerited. Unmerited reproach, however, is frequently capable of mortifying very severely even men of more than ordinary constancy” (Reference Smith TMS III.2.11).Footnote ¹⁴ And he continues: “Very few men can be satisfied with their own private consciousness that they have attained those qualities, or performed those actions, which they admire and think praise-worthy in other people; unless it is, at the same time, generally acknowledged that they possess the one, or have performed the other” (Reference Smith TMS III.2.28). Thus, even if people may at times find themselves in the situation of the wise or of the vain, the majority are moved—most of the time—by another motivation: desire for the deserved approval of others.

It is in the failure to distinguish among these three distinct aspirations, along with reducing them to one vice (vanity), that Smith finds fault with Mandeville. Smith, by contrast, sees self-love as a virtuous motive for action in the case of the latter two. Moreover, he believes that these two together occur far more frequently than the first, which is pursued only by weaker persons or in rare moments of weakness in everyday life. Smith therefore leads us to understand that, if we wish to use the same term for all three aspirations, then it must be recognized that self-love is frequently a virtuous motive for action (Reference Smith TMS VII.ii.4.8). Smith perceives these two forms of self-love as being the most frequent, inasmuch as they comprise what he holds to be the most common, namely, the love of true glory. Accordingly, Smith observes that “the desire of becoming the proper objects of this respect, of deserving and obtaining this credit and rank among our equals, is, perhaps, the strongest of all our desires” (Reference Smith TMS VI.i.3).

What human beings desire most is neither the approbation of others alone nor self-approbation alone but a blending of the two: the approbation of others, which is considered to be deserved, since it chimes with one’s own self-approbation. Smith observes that self-love as self-approval makes people “happy and contented” (Reference Smith TMS III.2.3), but he adds that “it greatly confirms this happiness and contentment” when we find that other people, viewing our own character and conduct “with those very eyes with which we, in imagination only, were endeavouring to view them, see them precisely in the same light in which we ourselves had seen them. Their approbation necessarily confirms our own self-approbation” (Reference Smith TMS III.2.3; emphasis added). This confirmation is important also because we know the difficulty of being completely impartial with oneself and the risk of “self-deceit” (Reference Smith TMS III.4). Note that the motivation of seeking the others’ praise as confirmation of our praiseworthiness is not the same as pursuit of the others’ praise moderated by our desire for praiseworthiness (which scholars generally refer to when they argue that people seek praise and praiseworthiness).

More than a normative moral elevation from vanity to love of true glory, and from love of true glory to love of virtue —as stated by Hanley (Reference Hanley2009, pp. 92–99)—in TMS there seems to be an attempt to describe the desire for the approval of others and the desire for self-approval as two diametrically opposed and extreme aspirations, which combine in the desire for deserved approval as a third and more representative motive for action.Footnote ¹⁵

III. DESERVED APPROVAL AS THE MOTIVE OF EXCHANGE

Having identified three kinds of self-love in TMS, we can see how the third kind offers an interpretation of exchange in WN that goes beyond non-tuism and the desire for the others’ approval. In his Lectures on Jurisprudence (Reference Smith LJ ), Smith observes: “It is not from benevolence, as the dogs, but from selflove that man expects any thing” (Reference Smith LJ B, pp. 219–220; emphasis added). If dogs try to gain the benevolence of others by “fawning and flattering” (Reference Smith LJ A, vi.44; see also Reference Smith WN II.ii.2), and so by playing on the others’ love of approbation, human beings, instead, look to the others’ self-love.

Implicitly, then, the self-love Smith speaks of in WN is not appealed to through flattery; it does not, that is, correspond to the desire for praise to which Mandeville refers. At the same time, the self-love Smith is referring to in WN cannot be understood as the desire for self-approval alone, which seeks no rewards from any others (see Hanley Reference Hanley2009). If reference to the two opposite forms of self-love—the love of others’ approval or the love of self-approval— will not suffice for us to understand the motive of exchange in Reference Smith WN (I.ii.2), we can instead assume that here Smith is referring to the stronger and more representative form of self-love, understood as the desire for the deserved approval from others.Footnote ¹⁶

Most of us, according to Smith, have an interest in receiving confirmation of our self-approval from others through their open recognition of the esteem we deserve.

This recognition can be revealed by the services or “good offices” that the others offer us in exchange for the services we offer to them.Footnote ¹⁷ When we deserve a certain degree of praise from the others for being able to provide them with some services, they can display their appraisal through the services they offer us in exchange. In this way, they show how much they appreciate our services. Confirmation of having performed to others truly good offices (thus, confirmation that we deserve some praise) will not come from the flattery that other people might regale us with but from what they actually intend to give us in exchange.

When the others offer us something in exchange, they are revealing that they deem our services to be worth as much as theirs. Through this comparison we can explicitly know how much they esteem us for having performed those services. For example, in primitive society, if I spend two hours making an arrow that can be useful to others, they show me how much they appreciate my effort by giving me in exchange something they consider of similar value. If they are willing to give me in exchange only something that can be produced in less than half an hour of equal effort, this probably means that they think I have wasted my time and that I do not really deserve the praise that I may have thought I deserved, since the arrow could have been made faster or better. Instead, if they offer me something that they can provide in two hours of equal effort, it implies that they probably think that I have not wasted my time, and that they appreciate the quality of my arrow (as in fact I do, otherwise I would probably not have spent that time producing it). They therefore show approval of my performance and in a way encourage me to continue (while, in the previous case, they discourage me from doing so). In this way, I could decide to devote myself increasingly to this specific activity. If I excel in making the frame and cover of little huts, my neighbors will probably often ask for my help by offering me something in exchange that shows how much they appreciate my skill.

If I am a brewer in a commercial society and people mostly prefer other brewers, I would probably be discouraged from continuing since I do not find confirmation of my own self-assessment in their evaluation. On the other hand, if my clients are willing to pay even more for my beer than for other beers, this means that they really appreciate my ingenuity.Footnote ¹⁸ If I am not a brewer but a client, the fact that I am able to buy beer shows to the brewer that I am not a beggar and that I deserved that beer because the services I provided to someone else were appreciated enough to allow me to buy that beer. When I negotiate my money for that beer, I am implicitly proposing or accepting an equivalence between the deserved approval I received for the services I provided to others (revealed by that amount of money) and the approval that I bestow on the brewer for that beer. If I do not buy the beer directly from the brewer but in a pub, it does not imply that exchange could not work in the way described here. The fact that I often go to that pub to buy that beer might mean that I appreciate not only how the beer is brewed but also how it is distributed (assuming, of course, that the brewer and the pub do not have monopolistic positions). Thus, exchange could take this form both for sellers and buyers, including when the buyers offer nothing but money for goods or services that the sellers may not even have produced themselves. In this case, when both parties agree on the equivalence of the exchange, it implies that each of them sees the other’s esteem as a possible confirmation of their own self-assessment. Thus, exchange takes place when both parties can find satisfaction of their shared desire for well-deserved approval.

In this scenario, exchange does not necessarily take the form of a tug-of-war between two parties, each seeking to give as little and gain as much as possible regardless of the praise each deserves—which, however, is always a possibility (although hardly a way to win the deserved approval they wish for).Footnote ¹⁹ If the interest of both parties is to obtain the approval they deserve, then what is primarily sought in exchange is precisely that very equivalence that it consists in (as desired confirmation of the esteem that each party deserves).Footnote ²⁰ Addressing the other’s self-love in exchange (Reference Smith WN I.ii.2), then, could mean touching upon this desire by immediately proposing an equivalence: “Give me that which I want, and you shall have this which you want” (Reference Smith WN I.ii.2; emphasis added).

This kind of exchange comes about when both parties impartially balance their reciprocal interests in seeing the approval they deserve recognized. The impartial evaluation of interests can be achieved when each side is able to express their own evaluation as if consulting a third person, equidistant from both parties.Footnote ²¹ In order to be able to balance our interests with those of the other, Smith observes, “we must view them, neither from our own place nor yet from his, neither with our own eyes nor yet with his, but from the place and with the eyes of a third person, who has no particular connexion with either, and who judges with impartiality between us” (Reference Smith TMS III.3.3; emphasis added). This third person is the impartial spectator.

Shortly before the passage quoted above, Smith observes: “It is only by consulting this judge within, that we can ever see what relates to ourselves in its proper shape and dimensions; or that we can ever make any proper comparison between our own interests and those of other people” (Reference Smith TMS III.3.1; emphasis added). This is how either party, rather than just moderating their own presumed partial interest, can impartially compare both respective interests. It is by consulting the imaginary impartial spectator that the parties to exchange can balance their respective interests and agree on an equivalence that satisfies their desire for deserved praise.Footnote ²²

But, as Smith observes, “it is often difficult to ascertain the proportion between two different quantities of labour. The time spent in two different sorts of work will not always alone determine this proportion. The different degrees of hardship endured, and of ingenuity exercised, must likewise be taken into account” (Reference Smith WN I.v.4). And he adds: “it is not easy to find any accurate measure either of hardship or ingenuity” (ibid.). Many factors need to be evaluated: for example, the training required, the trustworthiness, the risk, and the honorableness of the employments (see Reference Smith WN I.x.b; see also Young Reference Young1985). Since it is not easy to find any accurate measure of either hardship or ingenuity, Smith says, prices are determined by the “higgling and bargaining of the market” (Reference Smith WN I.v.4).Footnote ²³ If the rules for determining prices were as precise as “the rules of grammar” (as, for Smith, in the case of corrective justice, see Reference Smith TMS VII.iv.1), then there would be no room for any kind of discussion, and prices could be established independently of market negotiations, for example by the government. However, this can hardly be seen as the way Smith explains exchange and the determination of prices. As Vivenne Brown pointed out, when there are no precise rules for judging, judgment is “open to interpretation by the agent” (Brown Reference Brown2016, p. 244), who has to judge impartially “all the different shades and gradations of circumstance, character, and situation” (Reference Smith TMS VI.ii.1.22).Footnote ²⁴ The process of judging described by Smith “is always local and situated, never from a cosmic standpoint” (Brown Reference Brown2016, p. 245). In the same way, what Smith calls “natural price” corresponds to “the natural rates of wages, profit, and rent, at the time and place in which they commonly prevail” (Reference Smith WN I.vii.3; emphasis added).

Social rules represent the consensus emerging in society at a certain time and place as a result of a number of impartial judgments in specific situations (see Brown Reference Brown2016). Similarly, natural price could emerge at a certain time and place as a result of a number of negotiations that gave rise to specific agreed-upon prices. Although these prices are not necessarily identical for similar services or goods (since no “accurate measure” exists to evaluate different kinds of labor), being the outcome of impartial judgments they will approximate one another “according to that sort of rough equality which, though not exact, is sufficient for carrying on the business of common life” (Reference Smith WN I.v.4). In this sense, when there is no excess of demand and supply in the market, the “higgling and bargaining” can give rise to agreed-upon judgments and thus to similar prices for similar services at a certain time and place, from which the natural price emerges. As Smith explains: “When the quantity brought to market is just sufficient to supply the effectual demand and no more, the market price naturally comes to be either exactly, or as nearly as can be judged of, the same with the natural price” (Reference Smith WN I.vii.11; emphasis added).Footnote ²⁵ The “effectual demand” is the demand of “those who are willing to pay the natural price,” that is—following the reading proposed here—the demand of those who are willing to recognize the praise deserved for “raising, preparing, and bringing” the commodities to market, to thus pay rent and wages and make provision for profit at their natural rates. Jeffrey Young affirmed that the natural price can be based on the “spectator mechanism,” arguing, “the natural price will be a consensus price which individuals and the spectator will view as fair in the sense of not causing injury to any party. … Smith grounds exchange value on a spectator-approved social consensus in the same way he grounds justice and morality in general. This consensus is arrived at through the ‘higgling and bargaining’” (Young Reference Young1986, pp. 375–376). In the exchange suggested here, people do not refer to the impartial spectator solely for the sake of respect for their property, and thus corrective justice (see Young Reference Young1986, Reference Young1997),Footnote ²⁶ but for the deliberate purpose of recognizing the praise deserved by both parties as a way to achieve the equivalence that satisfies the common desire for deserved esteem.

In this process, each party seeks to persuade the other that what they offer truly deserves the other’s attention, making clear what they believe to be the true value of the advantage the other would enjoy.Footnote ²⁷ It is in this sense that we can understand what Smith means when he writes that in exchange with others we “never talk to them of our own necessities but of their advantages” (Reference Smith WN I.ii.2). Addressing the self-love of others and showing them their advantages involve our capacity to be other-directed.Footnote ²⁸ Showing others their advantages could be understood as simulating a concern for the advantages of the other exchangers in order to obtain their approval, as it appears at the beginning of the Fable of the Bees (Reference Mandeville FB I, p. 4) and in the passage from Rousseau’s Second Discourse ([1755] Reference Rousseau2008) translated and published by Smith ([1756] Reference Smith and Smith1980) in his Letter to the Authors of the Edinburgh Review (see Force Reference Force2003, pp. 130–132; Rasmussen Reference Rasmussen2008, p. 79; Walraevens Reference Walraevens2010, p. 17; Griswold Reference Griswold, Paganelli, Rasmussen and Smith2018, p. 204). However, according to Smith it would be mortifying to succeed in gaining the approval of others without at the same time being aware of deserving it, as would gaining the credit from others without at the same time being aware of deserving it (Reference Smith TMS VII.iv.24).Footnote ²⁹ This does not mean that in exchange people cannot just “make it appear” that the others have an advantage (as Smith says in Reference Smith LJ A, vi.45; see also Walraevens Reference Walraevens2010, p. 17), but simply that if we wish above all to obtain deserved credit and deserved approval, the motive for exchange should not be our own interest passed off as the interest of the other party. In this case, the motive is the desire to persuade the others that what we are giving is really worth what we are receiving in exchange. If praise has sense “as a proof of our own praiseworthiness,” then—Smith explains clearly—“we never should endeavour to obtain it by unfair means” (Reference Smith TMS III.2.24). Otherwise, it would not constitute reliable proof and thus prove truly gratifying.Footnote ³⁰ In this sense, we would be fair not because we desired to obtain the approval of others without hurting them—thus moderating our desire for praise with our desire for praiseworthiness (e.g., Young Reference Young1997, Griswold Reference Griswold1999, Fleischacker Reference Fleischacker2004)—but rather because, otherwise, we could not consider the others’ praise as proof of our praiseworthiness (which, in this case, is our motive for exchange).

Addressing others’ self-love through the capacity to identify with them has often been understood as a means of devising a “strategy”—not necessarily deceitful—to obtain from others what interests us (Fleischacker Reference Fleischacker2004, pp. 90–99; see also Fontaine Reference Fontaine1997, pp. 269–270; Dellemotte Reference Dellemotte2005, pp. 67–71; Walraevens Reference Walraevens2010, p. 24). In this sense, non-tuism would explain Smith’s thought here. Samuel Fleischacker clarifies it thus: “I may not love my butcher and baker, I may indeed have no feelings for them at all, but to get what I want from them, I must at least moderate my self-centeredness down to the point at which I can present to them a plausible understanding of their needs and a willingness to help fulfill those needs” (Reference Fleischacker1999, pp. 155–156).Footnote ³¹ Moderation of self-love would allow us to come up with an acceptable and even attractive proposal (see Fleischacker Reference Fleischacker1999; see also Young Reference Young1986 and Reference Young1997; Fontaine Reference Fontaine1997; Walraevens Reference Walraevens2010).Footnote ³² However, our motivation would remain the pursuit of our own interest, rather than the right balance between our own interest and that of the other party.Footnote ³³ This balance might possibly be the consequence of our strategic moderation but not our aim; so the motive for exchange is not this balance. This implies that self-love—even if moderate and understood as self-interest and not as selfishness—could lead to obtaining from the exchange more than any impartial spectator would judge we deserve, because “the final outcome will depend on each one’s negotiation or communication power” (Walraevens Reference Walraevens2010, p. 27; see also Dellemotte Reference Dellemotte2005). Even in the case of dealers obliged to contain their self-love and to go beyond their partial and selfish position, we would have a seller “who wants to sell at the highest price” and a buyer that “wants to buy at the lowest price” (Walraevens Reference Walraevens2010, p. 26). In this case, the final reason for the exchange is still the pursuit of one’s own interest, and the imaginary change of position with the other person is the strategic means to “discover his preferences” and reach one’s own ends through the agreement (Walraevens Reference Walraevens2010, pp. 25–29; see also Fontaine Reference Fontaine1997; Dellemotte Reference Dellemotte2005). As Wicksteed observed, what makes exchange an economic transaction is that “I am not considering you except as a link in the chain, or considering your desires except as the means by which I may gratify those of some one else—not necessarily myself” (Reference Wicksteed1910, p. 174).

By contrast, the self-love corresponding to the desire for deserved approval does not need to be moderated and seeks just to satisfy the interests of both parties in exchange, without having to be considered a form of benevolence in consequence.Footnote ³⁴ If we assume that the self-love of the others represents their desire for deserved approval, then addressing it would mean recognizing the praise the other party deserves by proposing an exchange that reveals this recognition, and which at the same time recognizes the esteem we deserve. Thus, when Smith observes that we do not talk to others of our needs but of their advantages, he could well mean that we make the worth of our services explicit vis-à-vis those of the others. This would mean that what we offer others is not a deceitful proposal (as in Force Reference Force2003) or a just barely acceptable proposal (as in Fleischacker Reference Fleischacker2004) but a proposal that reflects what we really believe corresponds to the just balance of the rewards deserved by both parties to the exchange. In this sense, the accord will occur when both parties consider that the approval they deserve has been rightly recognized.Footnote ³⁵ On the other hand, if the evaluation of the counterparty remains distant despite reciprocal attempts at persuasion, then this kind of exchange does not take place at all—always a possibility.Footnote ³⁶

Exchange in WN can thus be seen as an object of desire in itself, as satisfaction of the strong desire of deserved approval. According to Young, “Smith’s emphasis on self-interest does not preclude the operation of another motive in market activity, i.e. the desire for the approbation of the spectator” (Reference Young1986, p. 369). Young refers to Reference Smith LJ (B, pp. 321–322)—where Smith traces the propensity to exchange to the desire to persuade—and notices two different motives for exchange: self-interest and the “pleasure of agreement” (Young Reference Young1997, pp. 60–61). Instead, if we understand self-love as vanity or love of the others’ approval and not as moderate self-love or self-interest, we have only one motive at work (as in Force Reference Force2003, pp. 130–132), which is the pleasure of having persuaded others. The reading proposed here suggests an alternative interpretation of this motive by focusing on the third kind of self-love: if we understand self-love as the desire to obtain deserved approval from others, then here too there is only one motive for exchange in operation, but we do not assume that Smith conceives of self-love as Mandeville or Rousseau do.

It is in this sense that here we can refer to the “pleasure of exchange.” This pleasure is not understood here as the pleasure of agreement deriving from the pleasure of persuading others and thus of obtaining their approval, even when we do not hurt them (as in Young Reference Young1986, p. 369; Reference Young1997, pp. 60–61; Dellemotte Reference Dellemotte2005, p. 63; Walraevens Reference Walraevens2010, p. 28). According to the reading proposed here, this pleasure derives from having been convinced by the offer of the others that they are truly persuaded that we deserve the appreciation they show us. It derives from the pleasure of persuading others that we truly deserve their praise, that is, of obtaining their deserved approval. In this sense, during the negotiations the parties to the exchange try to explain to one another the real worth of their mutual services, and to persuade each other of their respective deserved praise. The language of “higgling and bargaining” is therefore transparent—as Vivienne Brown points out (Reference Brown, de Marchi and Morgan1994b)—because it does not distort the others’ judgment through rhetorical imposition on them, and we do not need to suppose an “equal rhetorical power” between dealers (as instead in Walraevens Reference Walraevens2010, p. 27).Footnote ³⁷ However, this does not imply that the “higgling and bargaining of the market” does not affect the determination of the price (as instead Brown Reference Brown, de Marchi and Morgan1994b has it). In the chapter devoted to the mechanism of supply and effective demand, Smith does not refer back to the “higgling and bargaining.” But this is not because they have no effect on the determination of the natural price. On the contrary, it is the mechanism of supply and effective demand that has no effect on determining the natural price. This mechanism’s only effect is in bringing the market price back to the natural price when the quantity supplied in the market is not quite enough to satisfy the effective demand. As already seen, the higgling and bargaining are crucial for the determination of the natural price because they can be seen as the result of a general consensus at a certain time and place that emerges from various negotiations approximating a similar price for similar services. However, it is also decisive because the higgling and bargaining allow us to find confirmation that the others are really persuaded that we deserve the praise they bestow on us. This desire to persuade others that we really deserve their esteem also accounts for the motivation that originally drove human beings to speech and to exchange.

IV. EXCHANGE BEFORE DIVISION OF LABOR

Smith associates propensity to exchange—which gives rise to the division of labor—with the faculty of speech and the desire to persuade others (Reference Smith WN I.ii.2; Reference Smith LJ A, vi.56–57; Young Reference Young1986, Reference Young1997; Brown Reference Brown, de Marchi and Morgan1994b; Griswold Reference Griswold1999). This desire is often associated with the desire to persuade others as a way to impose one’s superiority over them, an aspect that is present in Mandeville and Rousseau (Macfie Reference Macfie1967, p. 115; Kerkhof Reference Kerkhof1995, p. 232; Lewis Reference Lewis2000; Kalyvas and Katznelson Reference Kalyvas and Katznelson2001; Force Reference Force2003, pp. 129–134, Hurtado Prieto Reference Hurtado Prieto2004, p. 18; Dellemotte Reference Dellemotte2005, p. 66; Walraevens Reference Walraevens2010, pp. 15–16).Footnote ³⁸ Smith, however, speaks of superiority really worthy of admiration, in contrast to the “strong Desire Men have to triumph over, as well as persuade others” as conceived by Mandeville (Reference Mandeville FB II, p. 345).

At the end of TMS, Smith observes that just as individuals are satisfied only when they obtain the approval from others that they believe they deserve, so they are truly satisfied only when they obtain the credit they believe they deserve (see Reference Smith TMS VII.iv.24). If this credit is to be considered confirmation of one’s self-evaluation, each must be convinced that the others too hold it to be truly deserved; hence, we will have a natural inclination to persuade others that we are creditworthy (for believing oneself to be creditworthy without the others’ confirmation does not bring true satisfaction). This does not mean that people never try to persuade others even when they think they are mistaken (Reference Smith LJ B, pp. 222–223; Walraevens Reference Walraevens2010, p. 16). However, for Smith it is on the propensity to persuade others that we are really worthy of their credit that is “founded the faculty of speech” (Reference Smith TMS VII.iv.25).Footnote ³⁹

Smith argues that the origin of speech derives from “one of the strongest of all our natural desires,” which consists in wishing to persuade others of one’s own “real superiority” (Reference Smith TMS VII.iv.25; emphasis added). Smith sees speech as deriving from the desire to be truly believed and appreciated, or in other words to be considered creditworthy and praiseworthy also by the others (not only by oneself), and thus from regard for the truth.Footnote ⁴⁰

We can therefore argue that when Smith observes that the propensity to exchange derives from the faculty of speech (Reference Smith WN I.ii.2), as indeed from the desire to persuade others (Reference Smith LJ A, vi.56–57), in both cases he could be referring to the inclination to seek from others the approval and credit we deserve.

Smith scholars have seen probity in exchange as the result of prudent regard for one’s own interest—that is, self-love moderated by the desire to be worthy of credit—which induces sellers not to cheat when exchanges are frequent (e.g., Walraevens Reference Walraevens2010, p. 21; Wells and Graafland Reference Wells and Graafland2012, p. 339).Footnote ⁴¹ According to this reading, probity is a consequence of the frequency of exchanges, and not part of the motive for exchange (as, instead, suggested here).Footnote ⁴² As Young observes, however, this reading would “make TMS a much more rationalistic theory than Smith intended” (Reference Young1986, p. 374). When Smith refers to probity in Reference Smith LJ (B, p. 328), he “is here thinking specifically of a commercial state, showing why honesty and punctuality are so highly valued in such societies,” but he is not “suggesting that these virtues have their origin in rational self-interest” (Young Reference Young1986, p. 374). According to Young, Smith does not account for mutual trust “on rationalistic grounds” related to “repetitive activity” but with “the desire to behave in a way which the impartial observer can sympathize with”; more than a consequence of the market, this desire is “necessary for the functioning of a market” (Reference Young1986, p. 374). Going beyond Young’s interpretation, behaving in a way that the impartial spectator can sympathize with not only has the role of limiting the action in order not to hurt the others and incur their disapproval, but it is part of the motive that drives to exchange. When the motive for exchange is the desire for deserved approval, we are not obliged to moderate our self-love while bargaining (driven by other motives: self-interest or others’ approval) in order to preserve our honor and reputation: it is our (third kind of) self-love that makes us enter the exchange seeking the credit and approval we deserve. This last kind of exchange can take place independently of the frequency of exchange, and so also when people rarely exchange—as in the case of primitive people who start exchanging before bartering becomes a frequent activity.

The interpretation proposed here helps us to explain how exchange may originally have taken place in primitive society where, according to Smith, there is no gain through division of labor (which is represented as a consequence of the propensity to exchange in WN). In the absence of this gain, we can hardly assume that “the propensity to truck, barter, and exchange one thing for another” (Reference Smith WN I.ii.1) originates in the universal “desire of bettering our condition” (Reference Smith WN II.iii.28).

In the absence of material interest, the propensity to exchange could be seen as originating in the desire for the others’ approval for its own sake. In this sense, exchange in primitive society would be based on self-love as desire for others’ approval, which we can call “Mandevillian exchange.”Footnote ⁴³ The interpretation of exchange proposed here, and based on self-love as desire for deserved approval, does not rule out the possibility that the Mandevillian vain and selfish may engage in exchange, as the historical existence of the mercantile system demonstrates. According to Smith, mercantilism and Mandevillian exchange do not represent what commerce “ought naturally to be” (Reference Smith WN IV.iii.c.9).Footnote ⁴⁴ Nevertheless, in commercial society there is room for the natural selfishness of merchants building an empire for their own benefit, where commerce becomes “the most fertile source of discord and animosity” (Reference Smith WN IV.III.2; see Paganelli Reference Paganelli2008).Footnote ⁴⁵ However, even if this natural selfishness and Mandevillian exchange can take place in commercial society, they cannot explain how exchange emerges in the early and rude state, giving rise to the division of labor and commercial society.

For exchange to take place, Mandeville deems it necessary for the division of labor, money, and a reference price system to be already in place. In the absence of these, i.e., in primitive society, natural discord amongst individuals would never allow them to come to agreement and so engage in exchange. They could look no further than mere survival, without enjoying the “reciprocal Services” which “are what Society consists in” and “are impracticable without Money” (Reference Mandeville FB II, p. 452).Footnote ⁴⁶ Even if the material interests were reduced to zero, as in the case of savages whose “Bellies were full,” because of their vanity “there would certainly be War before there could be any Agreement among them” (Reference Mandeville FB II, p. 136). Mandevillian exchange can be seen as an outcome and not as the origin of commercial society,Footnote ⁴⁷ which can, rather, be the case of exchange driven by the third form of self-love: the pleasure of deserved approval.

The savages described by Mandeville come into conflict even if no material interest is at stake. Those described by Smith, instead, tend in any case to come to agreement and to engage in exchange: “In a tribe of hunters or shepherds a particular person makes bows and arrows, for example, with more readiness and dexterity than any other. He frequently exchanges them for cattle or for venison with his companions; and he finds at last that he can in this manner get more cattle and venison, than if he himself went to the field to catch them” (Reference Smith WN I.ii.4; emphasis added).

The savages of Smith’s account first exchange and only subsequently realize that in this way they are able to obtain more goods than they otherwise would if they had to do everything by themselves. This means that they frequently exchange, although it takes some time to appreciate the advantage.Footnote ⁴⁸ In other words, they frequently exchange the fruits of their labor for goods that nevertheless they still think they have to procure by themselves. Those who make bows and arrows with more readiness and dexterity than anyone else exchange them for cattle and venison even if they think that in any case they have to go “to the field to catch them” and that in the end they will not have more cattle and venison thanks to the exchange. Thus, if they believe they will obtain nothing more than they can obtain by themselves working for their needs, the interested motive of obtaining more goods cannot be the reason why they should want to engage frequently in exchange.Footnote ⁴⁹ This also applies to the hypothesis of a “moderate self-love,” understood as self-interest and not as selfishness (Young Reference Young1997; Witztum Reference Witztum1998; Walraevens Reference Walraevens2010). Otherwise, this would mean that the savages described by Smith exchange because they are able to foresee the advantages of the division of labor and not because they have a natural propensity to exchange, beyond any consideration of such utility. But this is not the hypothesis Smith starts from in his explanation of the origin of the division of labor: “This division of labour, from which so many advantages are derived, is not originally the effect of any human wisdom, which foresees and intends that general opulence to which it gives occasion” (Reference Smith WN I.ii.1; see also Pack and Schliesser Reference Pack and Schliesser2018). This is also why Smith introduces a natural propensity to exchange in his argument.

In Smith’s account, exchange does not come about through calculation of the advantages of division of labor, to the extent that in his LJ, explaining this point, Smith refers to individuals that “at first make presents” to their neighbors and “in return get presents” (Reference Smith LJ B, p. 220). In this way, they realize how advantageous these practices can be, and so begin to divide labor amongst themselves (see Young Reference Young1997, pp. 58–62). However, in WN he leaves the matter of gifts behind, to go on directly to exchanges between savages.

The difference between reciprocal gifts and exchange is that the rules that apply to gratitude and generosity are “vague and indeterminate” (Reference Smith TMS III.6.9) and might not necessarily lead to the decision to specialize, as is the case when frequent exchanges have been made, offering the savage “the certainty of being able to exchange all that surplus part of the produce of his own labour” (Reference Smith WN I.ii.3). Our gratitude, Smith observes, need not necessarily correspond precisely to the value of the good offices received from another: “That as soon as we can we should make a return of equal, and if possible of superior value to the services we have received, would seem to be a pretty plain rule, and one which admitted of scarce any exceptions. Upon the most superficial examination, however, this rule will appear to be in the highest degree loose and inaccurate, and to admit of ten thousand exceptions” (Reference Smith TMS III.6.9).

Moreover, exacting gratitude by force would be even more improper than lack of gratitude (see Reference Smith TMS II.ii.1.3). Instead, we can always decide to withhold our good offices when the other party does not show the appreciation of them that we consider fitting. The other can demonstrate this fair evaluation by offering us in exchange something we consider to be of equal value.

Exchanging before realizing its advantageousness for obtaining more goods means seeking another type of gratification—for example, the pleasure we may have in seeing our services appreciated by others, to the extent that they are prepared to give something they have of equal value in exchange.Footnote ⁵⁰ At the same time, the gratification of others comes from the fact that we are also prepared to accept their services in exchange for ours. In this way exchange is accounted for even in the absence of material interests, without having to fall back on reciprocal benevolence.

Self-love as the desire for deserved approval helps us to explain exchange not only in commercial society, but also—in contrast with non-tuism and the desire for the others’ approval— in the early and rude state, constituting grounds for us to account for the propensity to exchange that gives rise to the division of labor and the process leading to commercial society.