Adam Smith’s Theory of Prudence Updated with Neuroscientific and Behavioral Evidence

Other-perspective taking (OPT), distancing, time discounting as well as risk and loss aversion highly affect decision-making. Even though they influence each other, so far these cognitive processes have been unrelated or only partly related to each other in neuroscience. This article proposes a philosophical interpretation of these cognitive processes that is elaborated in the updated theory of Adam Smith’s prudence (UTSP). The UTSP is inspired by Smith’s account of prudence and is in line with the neuroscientific and behavioral studies on OPT, distancing, time discounting as well as risk and loss aversion. The UTSP represents a framework aiming to interpret and connect these cognitive processes and providing a consistent and empirically sound account of a “Smithianly” prudent style of decision-making. The two pillars of the UTSP are the shift of perspective in space and time (from the individual to others and from the present self to the future self) and loss aversion. On the basis of this theory, a normative updated theory of Smithian prudence is outlined (NUTSP). The latter is useful for moral philosophy for two reasons: firstly, according to preliminary evidence, it is effective in guiding the agent in decisional contexts in which her well-being is at stake and she can affect other people with her actions. Secondly, since the NUTSP is based on neuroscientific findings on decision-making, it has a sound empirical basis that prevents a source of alienation for the agent.