Thoughts on economics and liberty

A fascinating look at Adam Smith’s life and philosophy

I came across an outstanding review of a new book on Adam Smith, entitled Adam Smith: An Enlightened Life by Nicholas Phillipson.

The review, by Adam Gopnik,originally published in The New Yorker on 18 October 2010 is extremely well written and throws vital light on Adam Smith the great classical liberal.

How to read the review?

I'd like to commend the review to you, which, however, is available at New Yorker only through subscription. If you don't subscribe to the New Yorker, you can read it on Synchrospace (here). (I don't know how the copyright system works in this case!) So go ahead and read it (here).

Just a short extract to stoke your interest:

[T]he idea that people live in groups, and that a shared sense of well-being is essential to an individual’s sense of himself, is at the heart of what Smith learned from him [David Hume]. “Man, born in a family, is compelled to maintain society, from necessity, from natural inclination, and from habit,” Hume wrote. Smith pressed harder at the question of how we do live together. Policing, force, plays a role, but people mostly get along well enough even when the cops are far away. “How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it,” Smith wrote.

The key leap between Hume’s thoughts on sympathy and Smith’s thoughts on money took place in the lectures on moral philosophy that Smith gave in the seventeen-fifties, and then turned into “The Theory of Moral Sentiments,” which he published in 1759. For Smith, social sympathy rests on that “principle to persuade which so much prevails in human nature.” His key concept is the idea of an impartial observer who lives within us, and whom we invent to judge our own actions. Sympathy alone, Smith makes plain, isn’t enough to make us good. If we saw our brother or our best friend being tortured on the rack, could we truly sympathize? Not unless we could imagine what it felt like ourselves; it is our own mind that makes us kind. Sympathy isn’t a reflex or a serene internal search; it’s work. Smith’s witness is the imaginary other we install inside ourselves to watch our own behavior.

It was this connection – between the work of being a social being and the work that social beings do – that began to rule Smith’s meditations on the market. For Smith, the market is imaginative sympathy on speed. “Man continually standing in need of the assistance of others, must fall upon some means to procure their help,” a student’s s lecture notes record Smith as saying. “This he does not merely by coaxing and courting; he does not expect it unless he can turn it to your advantage or make it appear to be so. Mere love is not sufficient for it, till he applies in some way to your self love. A bargain does this in the easiest manner.”

That last sentence is the really explosive one. A bargain does this in the easiest manner. Where can you find a sympathetic community, people working in uncanny harmony, each aware of the desires of the other and responding to them with grace and reciprocal charm? Forget the shepherds in Arcadia. Ignore the poets in Parnassus. Visit a mall. For Smith the plain-seeing Scot, the market may not be the most elegant instance of human sympathy, but it’s the most insistent: everybody has skin in the game. It can proceed peaceably only because of all those moral sentiments, those imaginary internal judges. That’s what keeps the mob from rushing the Victoria’s Secret and stealing knives from the Hoffritz and looting the Gap. Shopping, which for the church moralist is a straight path to sin, is for Smith a shortcut to sympathy. Money is the surest medium of exchange.

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