Final answer:
Adam Smith posited that when individuals act in their self-interest, society as a whole benefit due to the 'invisible hand' guiding market operations. Smith's theories are grounded in rational choice theory, but he also acknowledged human altruism in 'The Theory of Moral Sentiments.'
Step-by-step explanation:
Adam Smith provided a rationale for emphasizing the worth and goals of the individual over collective concepts such as the 'public good' or 'society.' He believed that when individuals pursue their self-interest, they inherently make decisions that result in the maximization of their benefits, which, due to the effect of the 'invisible hand', inadvertently lead to the production of goods and services most needed by society.
Smith's advocacy for the reduction of tariffs and governmental regulation was rooted in rational choice theory, which posits that individuals make rational choices to achieve their objectives. While modern scholars critique this view for oversimplifying human nature and overlooking moral failings, Smith also acknowledged in 'The Theory of Moral Sentiments' that humans exhibit altruistic tendencies, showing concern for the happiness of others.