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On the same note, Smith believed that such pursuance of self-interests cannot bar an individual from being endowed with sympathetic feelings towards other people Wilson and Dixon, , p. As such, it can be deduced that Adam Smith Problem is purely a misunderstanding of human behaviour. It is undeniable that the Wealth of Nations advocates for mercantilism in the market environment Herbener, , p.

This concept is based on self-interest and notable capitalism. On the other hand, the Theory of Moral Sentiments advocates for afforded assistance Wilson and Dixon, , p. In the mercenary exchange, people negotiate on prices and terms of trade to come up with agreeable conditions of the subsequent transaction.

Without any disturbances and misfortunes we could not possess real "felicity of mind". Adam Smith , There is no significant contradiction between the two forms of human nature. Seminar, 20 Quellen im However, during the negotiation process, each party offers the other some considerable reciprocal assistance Herbener, , p.

In its very basic form, the mercenary exchange is based on personal interests.

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However, during the negotiation process, each party offers the other some considerable reciprocal assistance Herbener, , p. The process involves role switching, which is tantamount to creation of coincidence of sentiments. Despite the fact that individuals in a business transaction are driven by self-interests as cited in Wealth of Nations , the negotiation process enables each of the parties to develop voluntary cooperation of the other Herbener, , p. This is a natural process that is guided by human behaviour, rather than a construct of rules of conduct.

The system of interaction in a market environment moderates sentiments which are considered as foundations of social setting in the Theory of Moral Sentiments. The relative incompatibility of self-interest and sympathy, which forms the basis of the Adam Smith Problem, ultimately dissolves during the negotiation process Wilson and Dixon, , p. These are natural depictions and the reality of human behaviour. Therefore, the structure of Adam Smith Problem depicts a misunderstanding of human behaviour.

One of the theorists who attempt to show the extent to which Adam Smith Problem is a misunderstanding of human behaviour is Chalmers. The human self, as depicted in the Wealth of Nations can effectively coexist with the moral sentiments of the Theory of Moral Sentiments Wilson and Dixon, , p. There is no significant contradiction between the two forms of human nature. To Chalmers, similar to Smith in way of thinking, self-interest does not necessarily preclude the development of affection towards others.

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Individuals who are motivated by self-love cannot independently act without developing a sense of reaction to other individuals Wilson and Dixon, , p. This amounts to sympathy, which is comparable to moral sentiments.

In human behaviour, as Chalmers believes, intrinsic learning element of self-interest is established through taking into consideration the feelings and profound needs of others element of sympathy Keppler and Chase, , p. Thus, coexistence of these two behavioural aspects is clearly a natural phenomenon of human behaviour. Chalmers embraces the notion that human act, regardless of the motive, is always moral to the core Wilson and Dixon, , p. It is from this behavioural conception that liberal economies are established. The prevalent affinities between individuals help in harmonising self-interests and social interests Asharaf, Camerer and Loewenstein, , p.

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3. Mercantilism

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