Smith's organizing principle (organon) throughout The Theory of Moral Sentiments is that moral judgment is always enshrouded in some kind of spectatorial sympathy, and he applies this consistently, even inventing a spectator to be sympathized with where necessary to provide that enshrouding.

Not only morality but happiness, pride, self-esteem, self-worth, and feelings of attractiveness derive from what other people think of us, which Roberts finds a deeply disturbing view because most people believe they live by their own principles independent of others' perceptions.

Smith allows for independence from external actual spectators, but it is an independence founded on dependence on an internal spectator which is itself derived from society, producing a constant bouncing back and forth between the 'man within' (how I view myself) and the 'man without' (how I view others viewing me), each affecting the other.

Smith offers a sociology of religion in which men, having no other model of intelligent beings than themselves, necessarily ascribe their own sentiments and passions to the mysterious beings they imagine but cannot see, effectively creating gods in man's own image (inverting the Judeo-Christian creation story), and moral judgments then become locked up with and enshrouded in those personified deities.

Klein interprets Smith's impartial spectator as ultimately a near-universal being emanating universalist wisdom—a single sun around which all orbit—while each individual possesses only their own imperfect internal representative ('man in the breast'); this generates infinite recursion, where any judge one creates can itself be judged by a deeper judge, all originating from oneself, opening the door to self-deception when one's created judge is not truly impartial.

Smith's universalism is not draconian or one-size-fits-all; what the universal impartial spectator deems proper depends heavily on context, tradition, constraints, and scarcities—exemplified by his strong condemnation of infanticide that nonetheless allows it pardonable when a fleeing parent could not save both themselves and the child—and because what is fit and just is 'loose, vague, and indeterminate,' it must be examined carefully, which opens the door to self-deception.

Smith writes as the ultimate armchair theorizer, laying down claims about how all people respond to moral, emotional, and economic situations with great self-confidence as if they were laws of human nature, never hedging with 'it seems to me' or 'in my experience,' despite having access to only one brain—his own.

Smith holds that humans are implanted with a desire not merely to be praised but to be praiseworthy, and the love of praiseworthiness is by no means derived altogether from the love of praise—proven introspectively by the fact that praise received for something undeserved does not feel as good as praise actually merited.

Smith's system contains a deep, ineradicable knowledge problem extending beyond the economy: an unknowability of the self (people don't know what they are capable of or whether they have truly done good), an unknowability of others' moral worth, and even an unknowability of the good itself, which connects to morality being loose, vague, and indeterminate.

When external accusation conflicts with our internal sense of innocence, an appeal lies from the verdict of real spectators to a higher tribunal—the man within the breast, the supposed impartial and well-informed spectator—and where even that internal judge cannot fully compensate for unjust external blame, the only judge who can know our real circumstances and motives perfectly is God, who solves the moral knowledge problem.

Smith argues mathematicians and natural philosophers experience little acrimony because the merit of their work is objectively clear to all, whereas poets, whose merit is loose, vague, and indeterminate, form cabals, cliques, and factions over disputed standing—and Roberts extends this to economics, where the absence of clear merit criteria leads the profession to rely on mathematical ability as a proxy and to fracture into factions over who is a good economist.

Smith proposes a divine plan of decentralized self-regulation in which the author of nature has made each man the immediate judge of mankind and his vicegerent (deputy) on earth to superintend his brethren's behavior, so that because we desire others' respect we are motivated to behave well, and we must judge others to motivate them in turn—a bottom-up, diffuse moral policing among equals.

Smith's China-earthquake passage, contrary to its common citation as evidence of pure selfishness, argues that what restrains a man from sacrificing a hundred million strangers to save his own little finger is not the feeble spark of benevolence but a stronger force—reason, principle, conscience, the man within the breast—and that what prompts genuinely noble acts is not love of mankind but love of what is honorable and noble in our own character, a deliberate inversion of the Wealth of Nations' butcher-baker passage.

Smith argues it is the wisdom of nature that we cannot fully compensate ourselves internally for unjust external blame, because if we could fully self-compensate we would not take the extra care to ensure nothing bad happens for which we would be blamed—so the inability to fully console ourselves keeps people vigilant.

Klein reframes Smithian virtue not as whether one acts in self-interest but as what one makes one's self-interest: beneficence and virtue reside in constructing a utility function—a character and identity—from which one derives pleasure in doing the right thing, and this constructed self-interest is itself subject to ongoing recursive judgment that pushes the moral circle ever wider (from self to family to community).

There is an apparent paradox in Smith that one seeks grandeur, dignity, and superiority of character by answering the impartial spectator's call which insists we are but one of the multitude, in no respect better than any other; Roberts proposes resolving this dual tension via the Jewish exhortation to keep two notes—'from dust I was created' and 'the universe was created for me'—and to hold both pride and humility simultaneously rather than seeking a middle, since pure distinction makes a monster and pure self-abnegation makes one suicidal.

Smith holds a dual and seemingly contradictory view of humanity—on one hand deprecating the 'mob of mankind' as coarse clay, weak, and in a present depraved state with wisdom being rare (a distinction-based, aristocratic-of-judgment view), and on the other hand an egalitarian view that everyone shares the same basic moral faculties, any stranger can pull you toward universal wisdom, and no one is really better than another (as with the porter and the philosopher differing only by circumstance).

Smith's observation that our passive feelings are sordid and selfish while our active principles are generous and noble can be read as a political argument for de-governmentalizing and de-politicizing society, because schooling, welfare, retirement, and care of one's family should be active matters of personal choice rather than passive arrangements decided from above through taxation, regulation, and government schooling—we are more virtuous the more active we are.

Roberts reports that reading Smith and imagining oneself observed by spectators is affecting and uncomfortable but makes one feel like a better person, while Klein adds that thinking about virtues is itself virtuous.

Smith critiques the 'whining and melancholy moralists' who urge us to grieve over distant calamities we can neither serve nor hurt, arguing we should not expend emotional energy on such cases; but Klein defends them, noting that because of unknowability we often misjudge whom we can serve or hurt, so figures like Peter Singer who raise such issues may be doing us a favor by alerting us to connections we had dismissed.

Smith embraces stoicism with a small 's' for private, selfish misfortunes—approving self-command in bearing one's own losses such as a lost limb—but holds that stoicism can be overdone and improper in cases like a parent's grief over a dead child, where seeming insensible is off-putting; the most admirable person joins both the amiable virtues (compassion, entering into others' feelings) and the respectable virtues (self-command, containing one's own concerns), which are complementary because being humane requires repressing one's own pressing needs.

Smith issues practical imperatives that solitude leads us to brood and overweight our own problems, so when down we should go into the world; conversation with a friend improves our temper, but conversation with a stranger improves it still more because a friend may indulge our brooding while a stranger will not, lifting us toward a wider, more impartial perspective—and conversely, when we feel like a big shot we should seek out people independent of us who will not flatter us.

Smith holds that the laws of justice are very seldom observed in war and negotiation, that ordinary wholesome virtues which earn esteem in private transactions are laughed at as folly in public transactions, and that in unjust wars it is the sovereign or rulers who are guilty while subjects are almost always perfectly innocent yet are punished as though guilty out of nationalism—an anti-nationalist, anti-governmentalization theme.

Smith criticizes women who wear makeup as a form of vanity, arguing it gains them admiration for a beauty they do not really possess, which Roberts suggests means Smith would not be a fan of plastic surgery either.

Smith argues that in a nation distracted by faction, few preserve their judgment untainted by the general contagion, that a true party man hates and despises candor (which is selected out of politics), that the real impartial spectator is most distant amidst the violence and rage of contending parties, and that partisans impute their own prejudices even to God—concluding that faction and fanaticism have always been by far the greatest corrupters of moral sentiments.

Roberts and Klein argue that being passionate in one's political views is distinct from being factional, since they advocate an anti-factional society in which contested matters like creationism-versus-evolution in schools would be removed from collective decision—just as there is no Republican or Democrat bundle of groceries at the supermarket, schooling could be de-governmentalized so neighbors respect each other's choices rather than fighting over a single 'ring of power.'

Smith makes an evolutionary observation that the continuation and propagation of the species depends entirely on the affection of the parent for the child, not the child for the parent, which Roberts connects to the Ten Commandments commanding us to honor our parents but not to love our children—because the natural affection toward children need not be commanded.

Smith claims that over time a man who suffers a great misfortune such as losing a leg gradually comes to adopt the view of the impartial spectator and recovers his natural tranquility, with the man who struggles least and most readily acquiesces recovering soonest—paralleling the phenomenon of lottery winners and quadriplegics returning to baseline—but Roberts pushes back that this is a huge leap of empirical faith for tragedies like losing a child, and that Smith, who had no children, may exhibit hubris here.

Klein connects Smith's idea that people gradually come to the impartial spectator's view over time to Kirzner's theory of entrepreneurial alertness—that people tend to notice what it is in their interest to notice—implying that just as Robinson Crusoe comes to notice he could make a net, people have an interest in coming to the more impartial view of their own life.

Klein interprets Smith's phrase 'the abstract and ideal spectator of our sentiments and conduct' as meaning an 'idea' (not actual/real) spectator, while Roberts reads 'ideal' normatively as the desirable man in the breast one ought to have—a sleeping or would-be better spectator that often requires being awakened and put in mind of his duty by the presence of a real spectator.

Roberts and Klein observe that Smith's grammatical gendering is inconsistent—the impartial spectator is referred to as 'he' while the author of nature is sometimes 'she' yet elsewhere 'he' (creating man 'after his own image')—and that Smith largely wrote about and observed a world of men, with female sensibilities only occasionally referenced.

Roberts notes that the tension of a person harboring a secret good or bad deed that no one knows about—creating an unbearable urge to have the world know and reward or punish it in full measure—is what generates much of the world's great art, citing Crime and Punishment, Dickens, and Sydney Carton.

The potential for self-deception by the wrongdoers of the world (the 'Raskolnikovs') is probably immense; because people want to go on with their lives, even a guilty person such as a hypothetical guilty O.J. Simpson would likely persuade himself of his innocence, so people vary enormously in regret, remorse, and the ability to put wrongdoing behind them—it is not as simple as either Dostoevsky's torment or Woody Allen's serene escape.