WOODROW Wilson – a Scots American – was the 13th President of Princeton University.

Wilson himself was deeply proud of his Scottish roots – he once said that "every line of strength in American history is a line coloured with Scottish blood".

Wilson may have been thinking in particular of the contribution to American history made by James Witherspoon, one of his predecessors at Princeton.

Witherspoon was a Paisley minister who became a great American patriot. Together with James Wilson of Fife, he was one of the two Scottish-born signatories to the Declaration of independence.

Three months before Witherspoon joined 55 others to sign the US Declaration of Independence, Adam Smith's Wealth of Nations was published.

I want to speak about the enduring relevance of Adam Smith. But I don't want to consider the Wealth of Nations alone. I want to consider it alongside Smith's earlier and to my mind equally important work, the Theory of Moral Sentiments"

Taken together, the moral philosophy of the first, and the science of economics of the second, provide the balanced outlook that the world needs to confront the major challenges of today. What Smith consistently appeals to is what might be called an enlightened self-interest.

In the Wealth of Nations, he points out: "What improves the circumstances of the greater part can never be regarded as an inconveniency to the whole. No society can be flourishing and happy, of which the far greater part of the members are poor and miserable."

At all levels – as individuals, as national governments, as citizens of the world – we need to put ourselves in other people's shoes a little bit more. Self-interest without sympathy does not serve anyone's interests.

I want to give two examples of that.

The first is the growth in inequality in some Western societies. The United Kingdom is now one of the 10 least equal societies in the Organisation for Economic Co-operation and Development. Scotland on its own fares slightly better, but far too many people in Scotland suffer the consequences of inequality – reduced educational attainment, poor health outcomes and shorter life expectancy.

Secondly, this inequality shows a lack of empathy among those in power. Too many leaders – not just in politics, although certainly in that field – too often don't consider how life feels for the most vulnerable people in our society.

The UK Government at the start of this week imposed what is called a "bedroom tax". It reduced housing benefit payments for people who are assessed to have a spare, or unnecessary, bedroom.

Even worse, a recent analysis for the Scottish Government shows that eight out of 10 of those who are affected by the bedroom tax are disabled. These people aren't living in luxury – many of them need to use their additional room for equipment .

Can you imagine that any Ministers would make such cuts if they had applied Smith's advice in the Theory of Moral Sentiments? If they had imagined what it would be like to be a disabled person forced to move? Or to be a single occupier facing a cut in benefits but without any viable choice of new accommodation?

We need empathy in tough economic times more than at any other time. And my own view is that in Scotland, that sense of empathy will motivate us to take and use the powers we need to change the direction of the country.

The second example is an international one – climate change, and in particular climate justice.

One of the difficulties with climate change is that its effects are often distant – in time and in location – from the actions which cause it. And so we have to imagine life for those worst affected.

People often see the lack of international agreement in addressing climate change as a failure of political will or initiative. It is. But it is also, surely, a failure of empathy – a failure of the fortunate to see, feel or imagine the consequences of inaction.

Climate justice is part of the solution. And it has at its heart the concept of empathy, or sympathy – an appeal to enlightened self-interest.

Scotland has for a several years attempted to set a good example.

We have the most ambitious carbon reduction legislation in the world, and as part of that we are championing renewable energy, and developing technologies which we hope can be applied worldwide, as we look to a more sustainable future.

And the Scottish Government has established the world's first-ever climate justice fund. It is focusing initially on water projects –- our first projects are helping communities affected by climate change in Malawi and Zambia.

Adam Smith shows the Scottish Enlightenment at its very best. Questioning, thoughtful and rational in his methods, it is a grave misfortune that he has been wrongly claimed by so many dogmatists over the years.

Taken together, The Wealth of Nations and The Theory of Moral Sentiments provide the balance that we need to face the challenges of the modern world.

Smith's achievement, over his two masterpieces, was to show that self-interest and sympathy gang together. If we take that message to heart, we can do much to secure both the wealth, and the wellbeing, of nations.