Our approach to faction focuses on Smith’s account of the interrelation between social distance and small group cohesion. We make the case that social distance is not necessarily constant in Smith’s system. As social distance shrinks, sympathy becomes more habitual and the affection we have for others increases (Peart and Levy, 2005b). Factions reduce social distance, and this gives them power and makes them dangerous. By modifying social distance, they created a disconnect between behavior of which we approve (cooperation) and consequences of which we disapprove. It is in this context that we find virtuous behavior with deleterious consequences. The identification of ‘corruption’ with faction is emphasized in Young (1997, pp.157-158). We take the additional step of connecting the identification to the conclusion that the institution that allows corrupt actions to flourish is in need of reform.

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Copyright © 2009 Edward Elgar Publishing. This chapter first appeared in Elgar Companion to Adam Smith.

Edited by: Jeffrey T. Young

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