Adam Smith on disaster and virtue

There are no words for what the people of Japan are experiencing: earthquake, tsunami and now, possibly, nuclear disaster.

In  The Theory of Moral Sentiments, Adam Smith wrote a troubling passage describing "a man of humanity's" reaction to a far distant earthquake:

Let us suppose that the great empire of China, with all its myriads of inhabitants, was suddenly swallowed up by an earthquake, and let us consider how a man of humanity in Europe, who had no sort of connexion with that part of the world, would be affected upon receiving intelligence of this dreadful calamity. He would, I imagine, first of all, express very strongly his sorrow for the misfortune of that unhappy people, he would make many melancholy reflections upon the precariousness of human life, and the vanity of all the labours of man, which could thus be annihilated in a moment. He would too, perhaps, if he was a man of speculation, enter into many reasonings concerning the effects which this disaster might produce upon the commerce of Europe, and the trade and business of the world in general. And when all this fine philosophy was over, when all these humane sentiments had been once fairly expressed, he would pursue his business or his pleasure, take his repose or his diversion, with the same ease and tranquillity, as if no such accident had happened. The most frivolous disaster which could befal himself would occasion a more real disturbance. If he was to lose his little finger to-morrow, he would not sleep to-night; but, provided he never saw them, he will snore with the most profound security over the ruin of a hundred millions of his brethren, and the destruction of that immense multitude seems plainly an object less interesting to him, than this paltry misfortune of his own. 

Smith's brutally honest description of this man's detachment must have shocked readers during his day, and is appalling to modern eyes. So many have family, friends or colleagues in Asia. Every hour new images, new tidings come. But now, as in Smith's time, we do not feel the pain of unknown others as intensely as our own sufferings.

Yet Smith's point is the limitations of a narrow account of human motivation. People do noble things, risking their lives for others, as workers are doing right now at the Fukushima Dai-ichi nuclear power plant.

To prevent, therefore, this paltry misfortune to himself, would a man of humanity be willing to sacrifice the lives of a hundred millions of his brethren, provided he had never seen them? Human nature startles with horror at the thought, and the world, in its greatest depravity and corruption, never produced such a villain as could be capable of entertaining it. But what makes this difference? When our passive feelings are almost always so sordid and so selfish, how comes it that our active principles should often be so generous and so noble? When we are always so much more deeply affected by whatever concerns ourselves, than by whatever concerns other men; what is it which prompts the generous, upon all occasions, and the mean upon many, to sacrifice their own interests to the greater interests of others? It is not the soft power of humanity, it is not that feeble spark of benevolence which Nature has lighted up in the human heart, that is thus capable of counteracting the strongest impulses of self-love. It is a stronger power, a more forcible motive, which exerts itself upon such occasions. It is reason, principle, conscience, the inhabitant of the breast, the man within, the great judge and arbiter of our conduct. It is he who, whenever we are about to act so as to affect the happiness of others, calls to us, with a voice capable of astonishing the most presumptuous of our passions, that we are but one of the multitude, in no respect better than any other in it; and that when we prefer ourselves so shamefully and so blindly to others, we become the proper objects of resentment, abhorrence, and execration. It is from him only that we learn the real littleness of ourselves, and of whatever relates to ourselves, and the natural misrepresentations of self-love can be corrected only by the eye of this impartial spectator. It is he who shows us the propriety of generosity and the deformity of injustice; the propriety of resigning the greatest interests of our own, for the yet greater interests of others, and the deformity of doing the smallest injury to another, in order to obtain the greatest benefit to ourselves. It is not the love of our neighbour, it is not the love of mankind, which upon many occasions prompts us to the practice of those divine virtues. It is a stronger love, a more powerful affection, which generally takes place upon such occasions; the love of what is honourable and noble, of the grandeur, and dignity, and superiority of our own characters.

Economics is often thought to presume selfishness. After all, "It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner." Yet the Theory of Moral Sentiments reveals that Smith himself understood that self-interest alone, or self-interest augmented by altruism -- "the feeble spark of benevolence" -- is not enough to explain the goodness of human action.

Comments

[Dean Sayers]

Adam Smith is widely ignored by the same groups which cite him as a founder of their economic narrative. This comment wouldn't be quite as surprising to someone who knew that Adam Smith supported taxes as a "badge of freedom," and felt that a completely free market would be very "destructive":

"...we are but one of the multitude, in no respect better than any other in it; and that when we prefer ourselves so shamefully and so blindly to others, we become the proper objects of resentment..."

Much like Keynes and Marx, the mainstream narrative would like nothing more than to cite these archetypes without even hinting at having any knowledge about them.

[Stephen Gordon]

Um, Greg: do dial it back a bit, will you? And Dean, I suppose it felt good to get that out of your system, but we could do without passive-aggressive accusations of ignorance and hypocrisy.

[Patrick]

An Inquiry into the Nature and Causes of the Wealth of Nations

http://www.gutenberg.org/ebooks/3300

[Kevin]

This is a post about the suffering in Japan. A shame that the debate has already taken such a turn.

I interpret the last paragraph as an admission by Smith that there is much we cannot begin to understand. I believe that a good economist understands this. That doesn't mean we don't try to find answers. However, we still can be wrong. In a constructive debate of the issues it is easier to determine on what points one agrees and disagrees, build consensus and move on.

A thoughtful post Frances.

[Kien]

There seems to be a revival in Adam Smith's writings. I read his Theory of Moral Sentiments recently.

There's an adage that we should always bet on self-interest because it invariably wins the race. On the other hand, societies could not function for long without benevolence and sympathy. If we compare self-interest and benevolence with the fundamental forces of physics - nuclear, electro-magnetic and gravity - benevolence is like gravity; it is the weakest force, yet it's the force that holds the universe together. So too, I think, benevolence holds societies and nations together. Self-interest could not work without sympathy and benevolence. Like the strong nuclear force, self-interest works within a very short range.

[Dean Sayers]

I wasn't accusing anyone here of the narrow mindedness I cited. The first thing that came to mind were some of the off-handed quips of TV personalities, and a few specific editorials in the local paper.

The confusion that Smith was a "blind-selfish" kind of thinker is just as ignorant as the idea that Marx didn't include the "equilibrium of self-interests" or "skilled v unskilled" labor concepts in his own theories. It's not like these are obscure or otherwise unheard of problems: I was deliberately mis-taught on both philosophers in school, and never got an alternate understanding until I took up their study myself.

I think its rather bizarre that anyone would think I'm attacking them here. The clear focus of my post was that the mainstream does not engage in honest discussion of the points at hand, but rather prejudices them towards a predetermined narrative. Perhaps the culture is different enough where you live to make you think otherwise. But, that I hadn't accused anyone here ought to be enough to give me the benefit of the doubt, even if you disagree with me.

[Frances Woolley]

Greg - I've deleted your comment because the language wasn't appropriate - if you'd like to make the same point slightly differently, please do so.

[Frances Woolley]

Kien: "benevolence is like gravity; it is the weakest force, yet it's the force that holds the universe together"

I understand benevolence and agree with what you say about its importance. What I have a harder time getting my head around is the idea of "the love of what is honourable and noble, of the grandeur, and dignity, and superiority of our own characters." That's much harder to reconcile with rational utility-maximizing calculus.

Kevin, thanks.

Dean - actually I wouldn't criticize mainstream economics education for teaching an incomplete/partial caricature Adam Smith, Marx etc. For the most part history of thought and methodological issues aren't discussed at all, and the overwhelming emphasis is on technique. Which, paradoxically, has led to a willingness to explore things like behavioural economics - it doesn't matter if it can't be explained by rational utility maximization as long as the econometrics are sound...

[kevin quinn]

Frances: this is an important passage in Smith especially when read with Hume in mind. Hume at one point says "It is not contrary to reason to prefer the destruction of half the world to the scratching of my finger" - well this is a paraphrase, but this is the canonical statement of the instrumental conception of rationality that economists rely so heavily on. Reason can tell us about means to ends, but nothing about what our ends should be. Smith in the passage you quote obviously disagrees: reason, conscience, the man within the breast motivates what Sen called counter-preferential choice. And I can't help thinking that Smith had this passage from Hume in mind when he wrote this.

[ian lee]

Frances,

The posts by each of you, day in and day out, demonstrate why WCI is so very important to policy discussions in Canada today. And each of you provide most diverse and fascinating perspectives. I do not know of any other space in Canada where analysis, debate and discussion of economics, business and public policy of this rigour occurs.

Scholarly conferences are mostly a huge waste of time while political parties yell at each other. The think tanks have to a significant degree stepped into the vacuum created by the retreat of the academy into sterile and not very meaningful discussions, but the think tanks "post and go" without follow on debate. The Globe and National Post largely succeed in encouraging a national conversation - but can only go so far, as they must consider space and eyeballs or risk losing readers and advertisers.

Remarkably, the five of you have succeeded in creating the ancient Greek agora in Canada - albeit now virtual. This is no mean feat. All MPs, journalists and analysts of public policy should read WCI regularly.

And I deeply appreciate your courage in discussing the oft maligned Adam Smith (who after all was a professor of moral philosophy).

Ian

[Vladimir]

Frances Woolley:
[A]ctually I wouldn't criticize mainstream economics education for teaching an incomplete/partial caricature Adam Smith...

True story: a few years ago, I saw a brilliant prank on a libertarian forum. Someone posted a few select quotes from Adam Smith that were quoted approvingly by Marx. The joke was that the poster wrote that the text was from a work by Marx, but omitted any mention of Smith. Blissfully unaware of their actual source, the commenters proceeded to denounce the quoted ideas as crazy. (Unfortunately, digging out the link would require some serious googling, for which I don't have the time right now.)

Moreover, when I read The Wealth of Nations, I was shocked to discover that Smith was basically a Malthusian before Malthus. Sure, the latter elaborated these ideas at much greater length, but Smith's view of the long-term trend in population and wages was just as dismal, and supported by much the same arguments. I was really startled by this, considering my earlier merry picture of Adam Smith that I had gotten from modern economic literature.

I am not an economist, but I think it's fair to say that for a non-economist I have an unusually high level of interest and knowledge in economics -- and it definitely seems to me that the picture of Adam Smith that the economic education/profession presents to people like me is an awful caricature.

[Stephen Gordon]

Ian: As the person who wrote the inaugural WCI post more than five years ago, thanks very much for those kind words.

[Dean Sayers]

Ian: This discussion shows how much the fields overlap. In fact, I was largely introduced to a lot of social and political ideas by Erich Fromm, who was a Psychoanalyst. I don't think any honest discussion of these issues can rule out a lot of the political and moral aspects therein (except, perhaps in very limited academic discussions).

Vladimir: I am not surprised that Smith had Malthus-like ideas. But I don't think that means that they are necessarily in the same "vein" so to speak. I hinted at some of Marx's ideas that are shared by others, but he also has a model which parallels marginalism, in his "socially necessary" v "socially superfluous" concept of labor value.

Despite the vitriol in the deleted post from Greg, he had a very important point: the overarching character of someone's works should be more important than oft-repeated quotes and characterizations. I still think there's a lot of obfuscation about these thinkers, however.

[Frances Woolley]

Kevin, that's really fascinating about Hume and the source of the little finger idea. I did not know that.

Ian, thanks so much for your kind words.

Vladimir, great story.

[POWinCA]

Dean, we can properly declare Adam Smith the founder of modern economics AND the source of our social philosophy without blindly chewing, swallowing, and digesting every word the man ever said. He's an economist and philosopher, not the Son of God!

Smith was clearly wrong about the Labor Theory of Value. If he arose from the grave, he might thank us for setting him straight.

We can quote Thomas Jefferson for his eloquent and passionate defense of liberty while still acknowledging his moral turpitude with respect to slavery.

Ideologues might be cherry pickers, but men of intellect can agree mostly but not universally with honored predecessors. Selecting pieces of prior works which are supported by evidence while discarding pieces which aren't is not cherry picking, dogma, or revisionism.

The body of knowledge has advanced somewhat since Smith's day. I think he would approve.

[Dean Sayers]

What makes him wrong about the labor theory of value? From what I have read of his - he's far closer to the truth than many contemporaneous economists. That his truths fail to provide edificial value to the interests of preeminent media today shouldn't diminish what he had to say.