Mandeville's paradox is named after Bernard Mandeville, who shows that actions which may be qualified as vicious with regard to individuals have benefits for society as a whole. This is already clear from the subtitle of his most famous work, The Fable of The Bees

The Fable of the Bees

The Fable of The Bees: or, Private Vices, Public Benefits is a book by Bernard Mandeville, consisting of the poem The Grumbling Hive: or, Knaves turn’d Honest and prose discussion of it. The poem was published in 1705 and the book first appeared in 1714...

: ‘Private Vices, Publick Benefits’. He states that "Fraud, Luxury, and Pride must live; Whilst we the Benefits receive.") (The Fable of the Bees, ‘The Moral’).

The philosopher

Philosophy

Philosophy is the study of general and fundamental problems, such as those connected with existence, knowledge, values, reason, mind, and language. Philosophy is distinguished from other ways of addressing such problems by its critical, generally systematic approach and its reliance on rational...

 and economist

Economist

An economist is a professional in the social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy...

 Adam Smith

Adam Smith

Adam Smith was a Scottish social philosopher and a pioneer of political economy. One of the key figures of the Scottish Enlightenment, Smith is the author of The Theory of Moral Sentiments and An Inquiry into the Nature and Causes of the Wealth of Nations...

 opposes this (although he defends a moderated version of this line of thought in his theory of the invisible hand

Invisible hand

In economics, invisible hand or invisible hand of the market is the term economists use to describe the self-regulating nature of the marketplace. This is a metaphor first coined by the economist Adam Smith...

), since Mandeville fails, in his opinion, to distinguish between vice and virtue (The Theory of Moral Sentiments

The Theory of Moral Sentiments

The Theory of Moral Sentiments was written by Adam Smith in 1759. It provided the ethical, philosophical, psychological, and methodological underpinnings to Smith's later works, including The Wealth of Nations , A Treatise on Public Opulence , Essays on Philosophical Subjects , and Lectures on...

, Part VII, Section II, Chapter 4 (‘Of licentious systems’)).