Adam Smith on Charles Murray

by on March 4, 2012 at 3:38 am in Books, History | Permalink

From Book V, chapter I:

In every civilised society, in every society where the distinction of ranks has once been completely established, there have been always two different schemes or systems of morality current at the same time; of which the one may be called the strict or austere; the other the liberal, or, if you will, the loose system. The former is generally admired and revered by the common people: the latter is commonly more esteemed and adopted by what are called people of fashion. The degree of disapprobation with which we ought to mark the vices of levity, the vices which are apt to arise from great prosperity, and from the excess of gaiety and good humour, seems to constitute the principal distinction between those two opposite schemes or systems. In the liberal or loose system, luxury, wanton and even disorderly mirth, the pursuit of pleasure to some degree of intemperance, the breach of chastity, at least in one of the two sexes, etc., provided they are not accompanied with gross indecency, and do not lead to falsehood or injustice, are generally treated with a good deal of indulgence, and are easily either excused or pardoned altogether. In the austere system, on the contrary, those excesses are regarded with the utmost abhorrence and detestation. The vices of levity are always ruinous to the common people, and a single week’s thoughtlessness and dissipation is often sufficient to undo a poor workman for ever, and to drive him through despair upon committing the most enormous crimes. The wiser and better sort of the common people, therefore, have always the utmost abhorrence and detestation of such excesses, which their experience tells them are so immediately fatal to people of their condition. The disorder and extravagance of several years, on the contrary, will not always ruin a man of fashion, and people of that rank are very apt to consider the power of indulging in some degree of excess as one of the advantages of their fortune, and the liberty of doing so without censure or reproach as one of the privileges which belong to their station. In people of their own station, therefore, they regard such excesses with but a small degree of disapprobation, and censure them either very slightly or not at all.

dearieme March 4, 2012 at 5:53 am

All economics is either footnotes to Smith or Ricardo, or wrong.

DK March 4, 2012 at 4:40 pm

+1

JB March 4, 2012 at 6:31 am

I agree with you in general. But what I see as a true problem of both systems is endemic corruption. This corruption establishes connections between business sector and politicians, who approve laws to improve the gains of those companies. It was not working bad, until certain level. But when the countries and especially US started to liberalize the banking sector, the greed raised. Without any afford, certain group of elites started to receive astronomical incomes.
I can see it as a significant change, when the good old capitalism turned to the new, corporate or global capitalism, which is much more focused on financial operation than on the production itself.
And because of the close connections between government and banking sector, the crisis in 2008 just led to what prof. Stiglitz calls Privatizing Profits, Socializing Losses. The biggest bailout to save the same people that caused the crisis. This was the decisive moment for me, when I realized that global capitalism lost its legitimacy.

steve har March 4, 2012 at 7:37 am

This is the 1% logic of blame the victim [again]: Limbaughism from another century except about $ not sex and not cigars.

Story-making from 18th C. scribblers hired by aristocrats aka “libertarians” who always prefer the bi-modal re-distribution economics of mine’s mine, too bad about you peasants.

Compare…

Nice to see another Nobel economist come right out and say the obvious, that concentration of wealth and income at the top kills demand and weakens the economy. The 1% are not job creators, they are job destroyers; a comment about a Stigletz post at:

http://economistsview.typepad.com/economistsview/2012/03/stiglitz-income-inequality-bad-for-economy.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+EconomistsView+%28Economist%27s+View+%28EconomistsView%29%29

Ralph R March 4, 2012 at 8:16 am

http://econlog.econlib.org/archives/2011/01/the_stranger.html

Bryan Caplan pretty much decimates the entire “political redistribution for the greater good” argument. i guess if you want to keep beating a dead horse, go for it. if people actually care about the poor, you would be against outrageous wealth transfers from the poor to the rich, like Social Security and Medicare. unless you think minimum wage workers paying for the leath care and retirement of millionaires does not qualify. of course if people were allowed to opt out, the whole thing comes crashing down like the Ponzi scheme it is.

Rahul March 4, 2012 at 8:33 am

So if you do “actually care for the poor”, what ought you to do? Nothing?

RG March 4, 2012 at 8:56 am

Voluntarily donate.

Calling people victims doesn’t change the mathematical fact that half of the population will always have below median wealth.

steve March 4, 2012 at 9:50 am

And when median wealth is decreasing or stagnating?

Steve

maguro March 4, 2012 at 10:12 am

Half the people will still be below the median.

JonF311 March 4, 2012 at 1:09 pm

Yes, half the population will always be below median wealth and income. But it des not follow that below median must mean lives that are nasty, brutish and short.

maguro March 4, 2012 at 2:14 pm

Surely there are places in the USA where life is generally nasty and brutish (if not particularly short by global standards), but I question whether that is a problem that can be resolved through wealth redistribution.

msgkings March 4, 2012 at 11:54 am

Fix the ‘outrageous’ wealth transfers by means-testing Soc Sec and Medicare. Which we are going to be doing soon.

JonF311 March 4, 2012 at 1:10 pm

Over all both social security and medicare are progressive in their benefits: lower income people get more for their money out of them than upper income people do.

Jan March 4, 2012 at 2:42 pm

Decimates? It is a poor argument that reeks of selfishness. It has zero nuance and tries to make a case for a libertarian worldview by dividing the world into strangers and non-strangers.

Medicare and SS are not poor-to-rich transfer programs. On the whole it is richer people subsidizing poorer people. You’re right though that we should stop with the providing those benefits to rich people if they don’t need it. Outrageous!

Floccina March 5, 2012 at 10:39 am

It might be best to pay everyone that same SS benefit and avoid the problems of disincentives to save.

Mike Giberson March 4, 2012 at 10:13 am

I haven’t follow the commentary on Charles Murray’s new book well enough to catch the allusion, but the quote from Adam Smith contributes to the discussion of the research mentioned in the post, “How good are the upper classes?.”

Jenny Davidson March 4, 2012 at 10:20 am

Funny! And do you know Hume’s interesting essay “Of the Middle Station in Life”?

Millian March 4, 2012 at 10:40 am

Against, surely, rather than on, per se. In any case, should we let celibate Scots set behavioural standards for the rest of us? We should not.

Zachary March 4, 2012 at 11:24 am

This was an observation, not a prescription.

Yancey Ward March 4, 2012 at 11:47 am

Unfortunately, Smith makes some people incapable of observing anything.

Steven Kopits March 4, 2012 at 11:57 am

As I have stated before, the difference between liberal (libertarian) and conservative ideologies may be addressed, in an important way, using principal-agent theory. I have earlier asserted that the liberal is the principal, the conservative is the agent. So let’s consider a 2×2 grid, with the horizontal axis being “philosophy displayed” and the vertical axis being “philosophy employed”. On each axis we have “Principal” (P) and “Agent” (A), so four boxes in total. (This is much easier to represent graphically.)

In this model, you can display the role of P or A and act on the basis of P or A.

If you show P and act P, you are a liberal (libertarian). You state that you are acting on your own behalf and are acting on your own behalf. Ted Turner has four girl friends and they all know it. So he states he’s non-monogamous and acts non-monogamous. (He’s not assuming the role of “Boyfriend”, which is just about impossible, in my experience.)

If you show A and act A, you’re a conservative. If you’re a policeman and show your uniform and badge, then you can fine a speeding motorist on behalf of the state. You’re not acting as an individual (P), but as an agent. Remember: conservative here is not defined as Bible-thumping, but as subsuming individual desires to assumed agency roles–but only to the extent required by the role. We’re not defining the role here (we’re not saying what a Mom should do), only that the individual should meet the requirements of the role, for any given role, to be a conservative. (Note that we’re beginning to disaggregate the notion of “conservative” into its constitutent parts.)

Now, if you show A but act P, you’re corrupt. You’re using your role as an agent to benefit yourself. A bureaucrat asking for a bribe in an example. He’s enriching himself by using his power as an agent.

On the other hand, if you show P but act A, then you’re either a leader (for managerial/group level issues) or a hero (if physical risk is involved). Thus, in this instance, the individual is assuming effort or risk beyond the accepted description of the role. “Above and beyond the call of duty” is the common phrase used to describe a hero.

When economists bemoan a lack of political will (surely Italy must be involved), they do not mean that politicians are engaging in either willful misconduct or gross negligence. They mean that politicians are not extending beyond their assumed roles, the normal boundaries of agency, to do what is politically unpopular. They are calling for leadership, the assumption of personal or professional risk for the benefit of the group as a whole. (Why economists would resort to such lame tactics is rather a mystery to me. Indeed, have economists even asked what agency an elected official is assuming? It’s not nearly as straight-forward as you would think.)

Now, if you show one role and act another, you’re a hypocrite. So, if Al Gore is all about reducing carbon footprint and has a 15,000 sf beach house, we might call him a hypocrite. He is showing “egalitarian”, but acting “liberal” (libertarian). If Newt claims to be a social conservative–accepting of traditional faithful roles of father and husband–but acting liberal by having an affair, he’s being a hypocrite. But similarly, if Ron Paul is for self-reliance but couldn’t countenance seeing people starving on the streets (and thinks the government should do something about it), then he’s also being a hypocrite. He’s showing liberal, but actually acting conservative.

You know, we have a lot of tools available beyond Smith and Ricardo. We’re not remotely finished with theory. But mind you, all the interesting theory is going to be related to conservatism, because the very topic is considered anathema to most economists.

MD33 March 4, 2012 at 2:01 pm

This is right on the nose.

Further, If Tyler’s audience were Smith’s common man rather than Smith’s liberal, this post would be titled “Adam Smith on Rick Santorum,” re: recent birth control and college comments (in the ‘college as consumption rather than investment’ model).

Andrew' March 5, 2012 at 11:21 am

If you ask an economics professor if you should go to college it’s hit-and-miss advice. Anyone other than economics it’s all miss.

Lord March 4, 2012 at 2:57 pm

One might interpret this as the upper class being on the vanguard, quick to see what lies ahead and adapt, so in Smith’s time the transition from the Mathusian age to a more prosperous period of industrial growth leads to a relaxation of austerity while our own sees a retrograde period from plenty to relative future impoverishment and a return to the old virtues which have yet to permeate the lower classes. This would see Smith and Murray as complementary rather than in opposition.

Lord March 4, 2012 at 5:32 pm

It does turn Murray’s story on its head though as it is not the lower classes that have abandoned their virtues which were lost long ago but the upper class that has regained them.

Steve Sailer March 4, 2012 at 3:41 pm

In the subsequent Victorian age, the growing prosperity, size, and prestige of the middle class led to greater discretion and, even, somewhat more bourgeois behavior on the part of Britain’s upper class.

Rich Berger March 4, 2012 at 6:35 pm

I am in the middle of reading Murray’s book, and I think the connection is tenuous.

Faze March 4, 2012 at 6:57 pm

I think what Tyler’s observing here is that, unlike in Adam Smith’s day, today’s upper classes have have extended their tolerance of lax behavior to the lower classes, even as they have withdrawn from their own kind. “Letting oneself go” will no longer ruin a poor man or woman, but it can be career-killing for an upper middle class salaryman or professional. What Steve Sailer may be observing in the Victorian era is the need for strict behavior and self control beginning its journey up the class ladder.

albatross March 4, 2012 at 9:50 pm

It seems to me Smith is describing the Paris Hiltons of his day, rather than the Tyler Cowans of his day. If you want to be part of the productive/intellectual/professional elite, you can be nontraditional in any number of ways, but they’d better not saddle you with huge hassles while you’re trying to climb the ladder.

A lot of traditional family values work well for having a relatively quiet, stable home life, which is really helpful for making long-term plans. Since it takes a fairly long time and some planning to get from being a very smart 18 year old to a tenured professor or practicing cardiologist or whatever, there’s probably a pretty big advantage in those stable, quiet home lives. Marriage and churches and suburbs are pretty good mechanisms for helping you keep your home life relatively stable and quiet.

mbka March 5, 2012 at 1:37 am

It seems most commenters have not noticed the Charles Murray reference or haven’t paid attention to the Smith quote. Or both. Murray in his latest book claims that the current US upper class has superior “austerity” type values and that it is these values that keep them on top. Murray also claims the the current US lower classes actually display a rather “liberal” behavior, which does them no good. Tyler quotes Smith to show how Smith held the opposing view on the people of his times: that the poorer classes held morals in higher esteem (because they were more at risk from mistakes) than the upper classes (which tolerated vice because it could not harm them as much). Murray would still claim on Smith that maybe the wealthy didn’t need morality back then while they do need it now. But at face I read Smith vs Murray as saying, morals have nothing to do with the success of the upper classes, although they possibly have something to do with the failures of the lower classes.

Andrew' March 5, 2012 at 5:30 am

But I was shocked to read Atlas Shrugged Ayn Rand’s description of the titillating conservative newspapers. Think UK newspapers. It’s also why you have the meme of the hot Southern Belles who are naughty but nice. As Jesus might say, it’s not the healthy that need a doctor but the sick.

In other words, it’s really the same. The elite can handle freedom because they are smart enough to stay within the real boundaries. The lower class need to be enamored with nominal boundaries that keep them well within the sins of their fathers. The trouble comes when you try to apply one to the other.

Andrew' March 5, 2012 at 5:26 am

It’s fine too right? I’ve always said that once you “hit” 70 you should be free to use whatever drugs you want.

We don’t have to just categorize for age either. If you can handle freedom, then you should be allowed to opt-in.

We should just make up T-shirts or put it on your driver’s license.

IVV March 5, 2012 at 11:58 am

I’ve often wondered if instead of having a drinking age, we should have a drinking license. As long as you show (and over time, demonstrate) you know not to drink and drive, or drink and fight, or what have you, then it’s okay to drink. Otherwise, you aren’t allowed.

rluser March 6, 2012 at 3:32 am

Amen

rluser March 6, 2012 at 3:32 am

(unfortuantely, ‘over time’ the rules change)

Tom of the Missouri March 5, 2012 at 11:39 am

….as was exactly the point of Dan Quale when he long ago criticized the example of the elite Murphy Brown for having a kid out of wedlock on TV for all her non-elite viewers to emulate as just another lifestyle choice available to all. Of course all the right thinking people ridiculed him to no end at the time, as I am sure they are now doing to Charles Murray and Adam Smith too for that matter.

Floccina March 5, 2012 at 11:59 am

What a genius Adam Smith was!

Diana March 7, 2012 at 10:16 pm

A lot of people here seem to be missing the point … but not all of them (and I think you know who you are!)

anyway, for what it’s worth, Charles Dickens also heartily criticized Charles Murray.

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