The Theory of Moral Sentiments - Adam Smith [3]
SYMPATHY AND SELF-LOVE
There is a strong tradition in the economic literature that has tended to assume—indeed, assert—that Smith believed “self-interest dominates the majority of men,” to quote the distinguished economist George Stigler, who took this belief, which he championed, to be “on Smithian lines.” A great many economists were—and some still are—evidently quite enchanted by something that has come to be called “rational choice theory,” in which rationality is identified with intelligently pursuing self-interest. Further, following that fashion in modern economics, a whole generation of rational choice political analysts and of experts in so-called “law and economics” have been cheerfully practicing the same narrow art. And they have been citing Smith in alleged support of their cramped and simplistic theory of human rationality.
The conviction that Smith believed in the dominating presence—and also the rationality—of human selfishness has even found its way into English literature via a limerick by Stephen Leacock, who was both a professional economist and a talented literary writer:
Adam, Adam, Adam Smith
Listen what I charge you with!
Didn’t you say
In a class one day
That selfishness was bound to pay?
Of all doctrines that was the Pith.
Wasn’t it, wasn’t it, wasn’t it, Smith?
In contrast, the Moral Sentiments actually begins with the following observation:
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. . . . That we often derive sorrow from the sorrow of others, is of a matter of fact too obvious to require any instances to prove it; for this sentiment, like all the other original passions of human nature, is by no means confined to the virtuous and humane, though they perhaps may feel it with the most exquisite sensibility. The greatest ruffian, the most hardened violator of the laws of society, is not altogether without it.
While some men are born small and some achieve smallness, it is clear enough that Smith has had much smallness thrust upon him.
Smith famously discussed that to explain the motivation for economic exchange in the market, we do not have to invoke any objective other than the pursuit of self-interest. In his most famous and widely quoted passage from The Wealth of Nations, he wrote: “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love.”5 Unfortunately, in the tradition of interpreting Smith as the guru of selfishness or self-love (as he often called it—not with great admiration), the reading of his writings does not seem to go much beyond those few lines, even though that discussion is addressed only to one very specific issue, namely exchange (rather than distribution or production) and, in particular, the motivation underlying exchange (rather than what makes normal exchanges sustainable, such as trust and confidence between the two parties). In the rest of Smith’s writings there are extensive discussions of the role of other motivations that influence human action and behavior.
ECONOMICS AND THE LIMITATIONS OF THE PROFIT MOTIVE
Beyond self-love, Smith discussed how the functioning of the economic systems in general and of the markets in particular can be helped enormously by other motives. There are two distinct propositions here. The first is one of epistemology, concerning the fact that human beings