Consideration of Public Interest by Economic Actors in the Market: A View from Japan

Toru Umeda, Professor, Reitaku University, Japan and Vice Chair, Transparency International Japan

Cosponsored with the Liu Institute for Asia and Asian Studies

This paper is part of my work to address ‘economism’, a prevailing ideology or conventional mindset, which I think needs to be overcome as it provides little ground for supporting public-good-serving behaviors.

Adam Smith appreciates "prudence" in the Theory of Moral Sentiments, while he remains silent about public-good-serving behaviors, especially the exercise of ‘superior prudence’, in the Wealth of Nations, focusing only on the pursuit of individual self-interest. Amartya Sen focused on the distancing of economics from ethics. He points out that human beings are not only motivated by their self-interest concerns, but also motivated out of concern for public good. Sharing his perspective, I would further argue that ‘superior prudence’ as well as ‘self-command’ should be appreciated to make convincing arguments for the public- or others-regarding behaviors of economic actors in the market. I question Sen’s attempt to integrally consider Smith’s works to produce a broad view of human beings, as WN provides little evidence supporting concern other than self-interest. Smith was free from economism in the TMS, while he was writing WN under the yoke of pristine economism. This caused the differing tones of his two works. The distancing of economics and ethics had already started within Smith himself. Critics say that selfish and unscrupulous pursuit of self-interest may lead to demise of a community. How this could be checked in practice concerns the exercise of the ‘superior prudence’ and partly related to how we should address the growing distance between economics and ethics.