Wolf Page 1 of 31 Beyond the Efficiency of the Market: Adam Smith on Sympathy and the Poor Law Brianne Wolf, University of Wisconsin-Madison 1 There is an ongoing debate about the morality of the market system. This debate often takes the form of two arguments, that the market improves the situation of the least well-off and is morally beneficial, or that it encourages moral depravity and potentially worsens the situation of the least advantaged. One scholar has characterized this dual-nature of the market as “The Problems and Promise of Commercial Society” (Rasmussen 2008). On the one hand, we are familiar with the promise of commerce, and the argument that the market is effective in alleviating poverty and spreading wealth by allowing people to coordinate diverse interests. Adam Smith points to these positive capacities of the market in Wealth of Nations (WN), arguing that commercial society generally improves the situation for the poorest, making them as “rich as an African King” (WN I.i.11). 2 Economists have referred to improvements in standards of living as an outcome of the market process (e.g. Kirzner 1992). Economists have also referenced the market order to describe both the laws and social structure that make market coordination and the improvement of material conditions possible, and the several orders that can result from such coordination (Hayek 1978 [1976]). They have described the market order as a “spontaneous order” that emerges from the coordination of diverse ends, arguing that it is neither an order that persists or is always visible, nor one that seeks a specific end. 3 The rules that govern the market order, such as private property, rule of law, and freedom of contract create a space where individuals can pursue their unique ends while also connecting with one another. The market process also fosters economic growth by facilitating the coordination of these ends within the market order. Further, some argue that the market not only facilitates material growth, but also encourages moral behavior by teaching virtues (e.g. McCloskey 2006), or even transforms actors in Interdisciplinary Studies of the Market Order: New Applications of Market Process Theory, edited by P.J. Boettke, V.H. Storr and C.J. Coyne. London: Rowman & Littlefield International, 2017.