Adam Smith was a philosopher and an economist who came up with the theory of moral sentiments. In this book “Theory of Moral Sentiments,” he seeks to understand the principle of justice in the economic realm. The book recognizes various economics and political sentiments. The book is also concerned with the moral behavior and the virtues that constitute ethics, justice and political economy. He then examines processes and ethical standards such as prudence, justice e, benevolence, and self-command (Campbell, 2015). This essay is a reflection of virtues, such as prudence justice and benevolence and self-command as outlined by Adam Smith’s Moral philosophies.
First, the virtue of prudence is a long-sighted consideration of our actions that we may have in the future. Prudence is very similar to the behavioral change of economic agent. Smith defines prudence as inferior virtues of these four topics. In the reflection of this concept in business and finance, the preparation of financial statements the accounting entity must take into account the risks expected and relate the losses obtained to the liabilities and assets at the time they occur, (Campbell, 2015). Therefore, in the long term business environment, the accounting firm must prudently exercise allowance of doubtful reserve accounts. In a case, where the specific item will cause an expense a prudent person would then reserve with a reasonable amount. GAAP, the Generally Accepted Accounting Principles, the concept of prudence are a guideline for an accountant to do the best judgments when determining and recording transactions.
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Secondly, the virtue of justice mainly focuses on contribution if leaders in human society. Smith approaches justice in the systems of laws and violation of existing principles of justice. In business, accounting and finance, we need to understand the principles of jurisprudence, (Campbell, 2015). The significant part we need to reflect here is the definition of justice and what it means to us. This virtue as outlined, we need to follow the law by doing justice to others. From Adams Smith observation the reflection is that we need to draw justice to natural equity. The act extended to native people should also apply to us. Smith shows us the reflection on the relationship between nature and law. The law governing property ownership both private and public environment.
Campbell (2015), critiques the question that arose on the monopoly restrictions and economic activities. On the other hand, Smith outlines the role of the government in laboring. The law of justice provides equality among mankind. Rules are designed to protect property. The concept of ownership, we reflect that an entity should acquire property in the most negotiable manner. Smith adds on the idea of ownership and labor, (Campbell, 2015). Legally, Smith tells us that a laborer has the right to the fruits of his work. Most economics authors think Smith did not treat economics independently from moral philosophy. I believe from these reflections this was contrary to the problem of distribution.
Thirdly, we reflect on Smith’s virtue of benevolence. Benevolence exhibits the degree and complexity of self- interests. Self-interests affect human economic behavior. This behavior begins with individual actions and set of features that are commonly shared by the majority in the society (Campbell, 2015). Smith uses this concept to explain the economic assumption of utility maximization. From this, we reflect that we need to realize some notions that cause problems on the capacity of the market. On divisions of labor and disintegration of individuals problems, Smith links the possibilities of the division of labor proceeded by undivided personality. He notes that every improvement we make in the market society has a more significant impact on the wages and rents. Smith tries to let us reflect that every laborer has a close connection between the interest and the interest of the society (Campbell, 2015). We learn that there are no spaces to reflect on productive or unproductive labor. In other terms, Smith tries to tell us that before divisive on of job, we need to manifest every faculty and feature such as employment in the shape of the division of labor.
Lastly on self-command, Smith here focuses on self-deception of wealth and the way the economy thrives by itself. In the pursuit that wealthy benefits the society, the system deployed by Smith sees the market aggregate exchanges of productions occupied by the industries, (Sen, 2012). Particular interest affects the nature and outcomes of all the transactions done within the economy. Smith explains the impact of self-interests in the laws governing the marketplace. We reflect that materials possessions are not the ones that bring happiness, but we should realize what is more important in our lives as far as materials well-being is concerned.
In conclusion, I have discussed various by Adam Smith. These virtues include prudence, justice, benevolence, and self-commands will tend to produce agreeable effects. I have determined the degree of importance for each virtue. The virtue of prudence clarifies the central idea of the Smiths system. Overall, I think Smith has contributed to the contemporary ethical theory. He has achieved the philosophical and moral sides of the economy. About self-relations with others I believe Smith has mainly used prudence not to oppose other philosophers. He has reframed the norms of conduct and justice been done to everyone. Finally, I consider Smiths concepts to be critical in the reflection of today’s businesses.
References
Campbell, W. F. (2015). Adam Smith's Theory of Justice, Prudence, and Beneficence. The American Economic Review , 57 (2), 571-577.
Sen, A. (2012). Adam Smith’s prudence. In Theory and reality in development (pp. 28-37). Palgrave Macmillan, London.
