The Paradox of Wealth and Happiness in Adam Smith’s The Theory of Moral Sentiments

Abstract

Smith’s statements on wealth and happiness are paradoxical. On the one hand, Smith states that individuals’ pursuit of wealth is beneficial for society because it leads to economic growth and establishes rank and order in society. On the other hand, he appears to say that pursuit of wealth leaves individuals unhappy. Griswold refers to this as ‘comic irony’. In this paper, by examining what Smith says about wealth and happiness, we attempt to resolve this paradox. Towards this end, we analyze the unconscious that is implicit in the Theory of Moral Sentiments. As we will describe, analyzing Smith’s statements by considering the role of the unconscious implies that the pursuit of great wealth can make individuals happy.