Das Adam Smith Problem
The second set of advocates for the book [Theory of Moral Sentiments] I usually find in media outlets, sophisticated media outlets at that, or I hear it over lunch table conversation. These claims suggest that Wealth of Nations covers the commercial, selfish side of human behavior, while Theory of Moral Sentiments is an account of the caring, empathetic side, or something like that. I wish I had a nickel for every time I read or heard that contrast. Maybe it is harmless enough, but – and I don’t completely understand why — it kind of makes me sick. It is simultaneously an attempt to claim a bland centrist middle ground, to snidely distance oneself from capitalism and selfishness, and reduce Smith to a series of empty clichés. It is trying to be pat rather than insightful. It is trying to give everything its place in a manner that we can then safely ignore.
Just for a start, I view Smith’s portrait of human nature in Wealth of Nations as rich and multi-faceted, a piece of behavioral economics, in modern terminology, rather than narrow, commercial, and purely selfish. And in Theory of Moral Sentiments yes people are empathetic, and show sympathy for others, but they are often caring in…pretty narrow and selfish ways. I just don’t think the “each book carves out its own sphere” understanding of the pair works very well.
My biggest takeaway from TMS is that humans beings make evaluations, including sympathetic evaluations but not only, based on local rather than global information. They put a lot of weight on what is right before their eyes and neglect the bigger picture. The very opening passage of TMS expresses how we can understand the emotions of others only through our own. We cannot look around corners to understand other minds directly, so we make inferences from our own experience. Smith demonstrates and then demonstrates that point again throughout the book.
That is a passage from my generative book, written by me, GOAT: Who is the Greatest Economist of all Time, and Why Does It Matter?