The Courts of Princes and the Marketplace of Equals: Two Institutional Settings for the Cultivation of Virtue in Smith’s Thought

court life british court markets and cooperation markets just sentiments

Jordan J. Ballor for AdamSmithWorks

Ballor looks to Smith on how royal and market institutions influence those in and around them.

"Smith wants to expand the scope and significance of market mores, where 'more important virtues' like industriousness, thrift, honesty, temperance, and prudence can be cultivated more consistently..."

July 26, 2023

In the courts of princes, in the drawing-rooms of the great…flattery and falsehood too often prevail…
Adam Smith, The Theory of Moral Sentiments

“Two different roads are presented to us,” writes Adam Smith in a justly famous passage, “equally leading to the attainment of this so much desired object,” that is, “to deserve, to acquire, and to enjoy the respect and admiration of mankind,” which Smith says, “are the great objects of ambition and emulation.”

Two different roads, says Smith, as well as “two different characters are presented to our emulation.” He continues to extends the imagery: “Two different models, two different pictures, are held out to us, according to which we might fashion our own character and behavior.”

These two different roads, characters, models, and pictures correspond to the two paths to attaining “the respect and admiration of mankind,” or as he also puts it, the fulfilment of the “desire to be both respectable and to be respected,” or praiseworthy and praised.

One road is “the study of wisdom and the practice of virtue; the other [is] the acquisition of wealth and greatness.”

Smith’s discussion comes at the conclusion of an exploration of the origin of ranks and ambition in society and the corruption of our moral sentiments by a fundamental disposition of human nature in favor of the second road as opposed to the first, that is, our “disposition to admire the rich and the great.”

But in addition to Smith’s usage of the imagery of two alternatives, or we might say, a choice architecture, whether that be two roads or two characters, I want to bring attention to another element of Smith’s discussion concerning what distinguishes these two options: a difference in institutional setting or context. One setting is princely courts, meaning both the space in which courtiers assembled and the courtiers themselves. (It was from this sense that the legal meaning of a tribunal for judicial investigation emerged.) The other setting is markets and commerce.

The two settings give rise to different tendencies in character and conduct, different ways of behaving. I call them mores, rather than morals or morality, because mores themselves can be better or worse. Mores do not necessarily deserve the sense of approval that “morals” and “morality” tend to suggest.

The courtly setting gives rise to what we might call “court mores,” which deal with positional goods and relate to prestige, proximity to power, and the like. The other we might call “market mores,” which have to do with mutual gain in exchange. To some extent, I think, Smith recognizes the legitimacy of each of these settings, but he judges that the scope of market mores should be expanded and court mores should be curtailed. There are tradeoffs, however, in both systems, tradeoffs that Smith acknowledges and reckons with. All of this has something to teach us today as we deal with the ongoing challenge to rightly order systems as they relate to the realities of both limited and positional goods as well as settings where mutual benefit and positive-sum exchanges are not only possible but ought to be encouraged.

Let’s go back a bit in Smith’s presentation to the discussion preceding the conclusion where he presents us with the two roads, to explore his treatment of two different institutional contexts for the cultivation of virtue and avoidance of vice, settings which inform his later conclusions regarding the compatibility of virtue and material gain in different institutional settings.

Court Mores

In his discussion “Of the origin of Ambition, and of the distinction of Ranks” in The Theory of Moral Sentiments (TMS), Smith describes the culture of power in his day. Those of material wealth, social power, and prestige, says Smith, offer “benefits [that] can extend to but a few; but their fortunes interest almost everybody.” Even though practically speaking the largesse and favor of the rich and powerful can only directly impact few people, their way of life, their wealth, and their station receive near universal attention and concern.

Large-scale private enterprise was rare in Smith’s time. We are accustomed to “the rich” including famous investors, inventor, and celebrities, and not necessarily implying political power and influence. In Smith’s day, however, great wealth generally implied political power and influence. That needs to be kept in mind when reading his words concerning wealth and greatness.

As Smith continues his examination of the nobility and aristocratic society, he observes that it takes no special virtues or merit to maintain or ascend the ranks of social status: “By what important accomplishments is the young nobleman instructed to support the dignity of his rank, and to render himself worthy of that superiority over his fellow-citizens, to which the virtue of his ancestors had raised them? Is it by knowledge, by industry, by patience, by self-denial, or by virtue of any kind?” No, says Smith, it is by the destiny of birth that some have been placed into noble and aristocratic families, and their concerns are cultivated to conform to the norms, values, and mores of their class.

In this cultural setting, some are born to lead and to occupy the higher stations of life. Of the young nobleman, Smith says, “His air, his manner, his deportment, all mark that elegant and grateful sense of his own superiority, which those who are born to inferior stations can hardly ever arrive at. These are the arts by which he proposes to make mankind more easily submit to his authority, and to govern their inclinations according to his own pleasure; and in this he is seldom disappointed.”

Smith apparently takes this phenomenon as natural, or at least typically characteristic of human societies. There are natural hierarchies, and these ranks, divisions, and classes may have different manifestations in different times and places. The phenomenon of the “distinction of ranks” by some standard, however, is universal in human society. Smith is well aware that governmental authority depends on focal points and conventions, and that differences in wealth, power, and family lineage provide focal points while differences in wisdom and virtue, “invisible and often uncertain,” do not (TMS 226.20, see also 253.30, LJ 321–22, 402).

But elevation based on court mores by no means reflects merit. Smith illustrates the point with the Sun King, Louis XIV. On what basis has history judged Louis to be a great king? “Was it by his extensive knowledge, by his exquisite judgment, or by his heroic valour? It was by none of these qualities,” Smith concludes. Instead, Louis excelled at the virtues that were necessary and appropriate in a courtly context. As Smith quotes one account of Louis’ success, the king “surpassed all his courtiers in the gracefulness of his shape, and the majestic beauty of his features. The sound of his voice, noble and affecting, gained those hearts which his presence intimidated. He had a step and a deportment which could suit only him and his rank, and which would have been ridiculous in any other person.”

The flair of aristocracy, or court mores, emphasizes one’s presentation, deportment, style, and grace. Traditional virtues like bravery, prudence, knowledge, patience, self-denial, and the like, are largely irrelevant. Of Louis, Smith concludes that compared with the royal flair, “no other virtue, it seems appeared to have any merit. Knowledge, industry, valour, and beneficence, trembled, were abashed, and lost all dignity before them.”

Smith goes so far as to say that in its vanity, court mores come to detest virtue: “All… the virtues which can fit, either for the council, the senate, or the field, are, by the insolent and insignificant flatterers, who commonly figure the most in such corrupted societies, held in the utmost contempt and derision.”

Market Mores

As opposed to court mores, consider market or commercial mores. Whereas the men and women of rank and distinction are concerned with the cultivation of appearances, the human beings who operate within the marketplace must concern themselves with the cultivation of a whole host of virtues, some of which Smith has already identified in his list of those things that are absent from the halls of courtly power and prestige.

As Smith puts it, the distinction between court mores and market mores also corresponds to a distinction between the public and the private man. Of the private man, Smith writes, “The most perfect modesty and plainness, joined to as much negligence as is consistent with the respect due to the company, ought to be the chief characteristics of the behaviour of a private man.” He continues:

If [the private man] ever hopes to distinguish himself, it must be by more important virtues. He must acquire dependants to balance the dependants of the great, and he has no other fund to pay them from, but the labour of his body, and the activity of his mind. He must cultivate these therefore: he must acquire superior knowledge in his profession, and superior industry in the exercise of it. He must be patient in labour, resolute in danger, and firm in distress. These talents he must bring into public view, by the difficulty, importance, and, at the same time, good judgment of his undertakings, and by the severe and unrelenting application with which he pursues them. Probity and prudence, generosity and frankness, must characterize his behaviour upon all ordinary occasions.

This is one summary of the character of those who excel in commercial and market settings as opposed to places where there is jockeying for position and proximity to political power and prerogative. Whereas court mores are characterized by hierarchy, aristocracy, privileges, positional competition, and tend to be zero-sum (because of their positional nature), market mores are characterized by a more egalitarian set of commercial virtues, expressed in a setting where mutually beneficial exchange is the norm. By reflecting on the setting, we come to understand what it is that tends to make the bourgeoisie more virtuous than courtiers.

The Contest between Court and Market Mores

Even though his presentation here in TMS of court mores is largely negative, it seems to me that Smith is not simply anti-aristocratic or anti-royalist. He is clear-eyed about the nature of court mores as a manifestation of institutional settings that run on contests for prestige, privilege, positional goods, and political power. It doesn’t follow, however, that Smith thinks that we should seek to eradicate such features of human nature.

For Smith, the challenge seems to be, first, to rightly evaluate and, second, to develop a political economy that does justice to the natural inclinations of human beings to sort into ranks and classes while also expanding the sphere of mutually beneficial exchange.

What we can see in his evaluation of the two institutional settings as they inform the concluding imagery of two roads, characters, models, and pictures is that Smith wants to expand the scope and significance of market mores, where “more important virtues” like industriousness, thrift, honesty, temperance, and prudence can be cultivated more consistently and universally.

“In the middling and inferior stations of life,” writes Smith, “the road to virtue and that to fortune, to such fortune, at least, as men in such stations can reasonably expect to acquire, are, happily, in most cases, very nearly the same.” He continues, “In such situations, therefore, we may generally expect a considerable degree of virtue; and, fortunately for the good morals of society, these are the situations of by far the greater part of mankind.” Markets and commercial societies are the institutional settings in which virtues are cultivated more consistently. “The good old proverb, therefore, that honesty is the best policy, holds, in such situations, almost always perfectly true.” Much of Smith’s later work in TMS as well as WN promotes the expansion of the settings that make honesty the best policy.

“In the superior stations of life the case is unhappily not always the same,” Smith writes with obvious understatement. The emphasis in court mores on appearances over substance leads to the cultivation of lesser virtues, or even simulacra of virtue along with all kinds of vices. “In the courts of princes, in the drawing-rooms of the great,” says Smith, “where success and preferment depend, not upon the esteem and intelligent and well-informed equals, but upon the fanciful and foolish favor of ignorant, presumptuous, and proud superiors; flattery and falsehood too often prevail over merit and abilities.”

We can read Smith’s larger project then as one in which he attempts to curtail court mores and expand market mores. And we can conclude with some words of wisdom for those of us born into the middling and inferior stations of life:

Are you in earnest resolved never to barter your liberty for the lordly servitude of a court, but to live free, fearless, and independent? There seems to be one way to continue in that virtuous resolution; and perhaps but one. Never enter into the place from whence so few have been able to return; never come within the circle of ambition; nor ever bring yourself into comparison with those masters of the earth who have already engrossed the attention of half mankind before you.

Jordan J. Ballor (Dr. theol., University of Zurich; Ph.D., Calvin Theological Seminary) is director of research at the Center for Religion, Culture & Democracy at First Liberty Institute. He is also associate director of the Junius Institute for Digital Reformation Research at Calvin Theological Seminary and the Henry Institute for the Study of Christianity & Politics at Calvin University and co-editor most recently of Theology, Morality, and Adam Smith.

This essay is part of the AdamSmithWorks series Just Sentiments curated by Daniel B. Klein and Erik Matson. New essays will be published on the fourth Wednesday of the month. You can read more about the series in this Speaking of Smith post, "Just Sentiments- Welcome!". Klein and Matson lead the Adam Smith Program in the Department of Economics at George Mason University, in association with the Mercatus Center. In the program, they study big ideas in jurisprudence, politics, ethics, and economics as they were pursued during the original arc of liberalism, especially in the 18th century in Britain.