Socialized view of man vs. rational choice theory: What does smith's sympathy have to say?

•Smith's sympathy is station-distancing that depicts the micro-micro mechanics of rationality.•Smith's sympathy does not support the socialized view of man promoted by some behavioral economists.•Smith's sympathy involves two functions, corresponding to two senses of rationality:•1. Smith's sympathy facilitates decision making, i.e., the determination of the rational decision.•2. Smith's sympathy functions as self-command, i.e., the execution of the rational decision to avoid dynamic inconsistency.

To explain the anomaly of cooperation in finitely repeated games, some economists advance a socialized view of man as an antidote to rational choice theory. This paper confronts these economists insofar as they trace the socialized view to Smith's theory of sympathy in The Theory of Moral Sentiments (TMS). TMS rather advances a view that anticipates rational choice theory. These economists misinterpret TMS because they fail to realize that Smith's sympathy actually involves two functions of sympathy: one that determines the optimal decision and another that determines the command of that decision. The dual function of sympathy parallels the two senses of rational choice: rationality as making the optimal decision and rationality as commanding that decision. Thus Smith's sympathy does not support the socialized view of man.