SOURCE: "The Mistake," in Adam Smith's Mistake: How a Moral Philosopher Invented Economics & Ended Morality, Shambhala, 1990, pp. 80–93.

In the following excerpt, Lux faults Smith's thesis (in The Wealth of Nations) that human self-interest is solely responsible for the economic well-being of the public, arguing that this theory fails to take into account the possibility of dishonesty and cheating on the part of economic actors.

The central statement of Adam Smith's Wealth of Nations—for history, and certainly for economics—is that which affirms the value of self-interest: "It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own self interest." The lines that follow this "butcher-baker" statement are often quoted as well: "We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but...