He is close to a group of thinkers who share a view that William James would have called "hard determinism," including Richard Double, Ted Honderich, Derk Pereboom, Galen Strawson, and the psychologist Daniel Wegner. Strawson was his thesis advisor at Oxford.

Smilansky believes that we typically have some "compatibilist free will," and that this often matters. Unlike Honderich and Pereboom, he also believes in compatibilist free will-based desert, and that compatibilist distinctions are central for moral and personal life. He calls for the establishment of a "Community of Responsibility" based upon the compatibilist distinctions.

He thinks that illusion matters a great deal in the free will problem, and that the illusion of libertarian free will is arguably positive, and probably even morally necessary.

Smilansky argues, somewhat dialectically, for a "Fundamental Dualism," that accepts both compatibilism and incompatibilism (viz., of moral responsibility with determinism). He calls himself a "compatibilist-dualist."

Smilansky suggests three questions for consideration:

1. Is there libertarian free will? This can be called the libertarian Coherence or Existence Question. Libertarians of course think that there is libertarian free will, compatibilists (typically) and hard determinists disagree. This first question is metaphysical or ontological, or perhaps logical.

2. If there is no libertarian free will, are we still in a reasonably good moral condition? This can be called the Compatibility Question; namely, are moral responsibility and related notions compatible with determinism (or with the absence of libertarian free will irrespective of determinism)? Compatibilism and hard determinism are opponents on the Compatibility Question. This question, in my opinion, is mostly ethical. The first proposal that I offer, Fundamental Dualism, relates to this second question, that of compatibility.

3. I offer pessimistic answers to the first two questions. In response to question 1, I claim that there is no libertarian free will, and in response to question 2, that compatibilism is insufficient. This leads to a third question: What are the consequences of the undoing of both libertarianism and (in part) compatibilism? I call this the Consequences Question, and its nature turns out to be complex. My second proposal, Illusionism on free will, relates to this third question of consequences.
(Free Will, Fundamental Dualism, and the Centrality of Illusion, in Oxford Handbook of Free Will, 2002, p. 490)

Smilansky calls it the "Assumption of Monism" to think that one must affirm either compatibilism or incompatibilism. This is what Ted Honderich calls the third mistake of the compatibilists and incompatibilists, that one or the other of them must be true.

Smilansky calls it his "Fundamental Dualism" to hold a mixed position including both. (Note that this dualism has nothing to do with great dualisms like mind/body.)

It seems to me that a harmful Assumption of Monism has seriously impaired the debate about free will at this point, and this Assumption of Monism helps explain why an explicit dualism such as I am presenting has not been previously developed. The Assumption of Monism is the assumption that ... one must affirm compatibilism or incompatibilism. In fact, there is no conceptual basis whatsoever for thinking that the Assumption of Monism is necessary. Compatibilism and incompatibilism are indeed logically inconsistent, but it is possible to hold a mixed, intermediate position that is not fully consistent with either. The Compatibility Question might be answered in a yes-and-no fashion, for there is no conceptual reason why it should not be the case that certain forms of moral responsibility require libertarian free will while other forms could be sustained without it. There is nothing to prevent incompatibilists and compatibilists from insisting that real moral responsibility does, or does not, require libertarian free will. But their case must be made in ethical terms, and it may well turn out that there is no single or exhaustive notion of moral responsibility. (p. 491)

The Fundamental Dualism, according to which we must be both compatibilists and hard determinists, was my first proposal. Now let us move on to the second. Illusion, I claim, is the vital but neglected key to the free will problem. I am not saying that we need to induce illusory beliefs concerning free will or can live with beliefs that we fully realize are illusory. Both of these positions would be highly implausible. Rather, I maintain that illusory beliefs are in place, and that the role they play is largely positive. (p. 497)

Illusionism is the position that illusion often has a large and positive role to play in the issue of free will. In arguing for the importance of illusion, I claim that we can see why it is useful, that it is a reality, and why by and large it ought to continue to be so. Illusory beliefs are in place concerning free will and moral responsibility, and the role they play is largely positive. Humanity is fortunately deceived on the free will issue, and this seems to be a condition of civilized morality and personal value.

The sense of "illusion" that I am using combines the falsity of a belief with some motivated role in forming and maintaining that belief—as in standard cases of wishful thinking or self-deception. However, it suffices that the beliefs are false and that this conclusion would be resisted were a challenge to arise. It is not necessary for us to determine the current level of illusion concerning free will.

The importance of illusion flows in two ways from the basic structure of the free will problem: first, indirectly, from the Fundamental Dualism on the Compatibility Question — the partial and varying validity of both compatibilism and hard determinism . Second, illusion flows directly and more deeply from the meaning of the very absence of the grounding that libertarian free will was thought to provide. We cannot live adequately with the dissonance of the two valid sides of the Fundamental Dualism, nor with a complete awareness of the deep significance of the absence of libertarian free will. We have to face the fact that there are basic beliefs that morally ought not to be abandoned, although they might destroy each other, or are even partly based on incoherent conceptions. At least for most people, these beliefs are potentially in need of motivated mediation and defense by illusion, ranging from wishful thinking to self-deception.

There is no libertarian free will: people can have limited forms of local control over their actions, but not the deep form of libertarian free will. Whether determinism is completely true or not, we cannot make sense of the sort of constitutive self-transcendence that would provide grounding for the deep sense of moral responsibility that libertarian free will was thought to supply. Our common libertarian assumptions cannot be sustained. All our actions, however an internalized and complex a form they may take, are the result of what we are, ultimately beyond our control.

The implications of the absence of libertarian free will are complex, and the standard assumption of the debate, the Assumption of Monism according to which we must be either compatibilists or hard determinists, is false. We saw why "forms of life" based on the compatibilist distinctions about control are possible and morally required but are also superficial and deeply problematic in ethical and personal terms. I claimed that the most plausible approach to the Compatibility Question is a complex compromise, which I called "Fundamental Dualism." The idea that either compatibilism or hard determinism can be adequate on its own is untenable.

There is then partial nonillusory grounding for many of our central free will-related beliefs, reactions, and practices, even in a world without libertarian free will. But in various complex ways, we require illusion in order to bring forth and maintain them. Illusion is seen to flow from the basic structure of the free will issue, the absence of libertarian free will, and the Fundamental Dualism concerning the implications. Revealing the large and mostly positive role of illusion concerning free will not only teaches us a great deal about the free will issue itself but also posits illusion as a pivotal factor in human life.

here Smilansky states concisely the Determinism Objection and the Randomness Objection to free will

Having set aside various irrelevant or false moves, we may now turn to the proper investigation of the libertarian case. The crucial question is the Coherence Question: namely, is the conception of libertarian free will coherent? This means that we are looking for formulations of libertarian free will which go beyond 'ordinary' determinism and random micro-particle indeterminism, for neither provides the basis of a libertarian conception of free will and moral responsibility.

In pursuit of such a 'third way' libertarians tend to limit their case in various ways: first, only some of a person's actions (decisions, choices) are said to be in libertarian terms free. Secondly, in any situation where the choice is considered free, the number of alternatives strictly available to the agent is limited. Such limitations create no immediate difficulties for this discussion. However, the problems begin when, within these limitations, a picture of the free (and moral responsibility meriting) choice or action is constructed.

A worthwhile libertarian model would provide a foundation for the central intuitions incompatibilists miss, with the best theoretical tools compatibilism can supply. One of the reasons why the desperateness of the libertarian case has not been overwhelmingly recognized is that often the basic ethical intuitions that a libertarian model should defend have not been set out with sufficient clarity in presentation of the models themselves. Once this is done, the impossibility of libertarian free will should become apparent.