Tuesday, March 11, 2008

Ill-Informed Attribution to Adam Smith Of Views on Selfishness

Richard Gwyn, regular columnist for the Toronto Star, contributes his version of Adam Smith’s moral philosophy and political economy (here), under the unpromising title of ‘Selfishness blamed for recession’. Yes, it’s a re-run of the Bruce Fein Folly in my post earlier this morning.

Read on:

As is well known, Adam Smith, the 18th century author of that groundbreaking economic treatise, The Wealth of Nations, decreed that the motivating force of economic growth was selfishness.

The desire of businessmen and shopkeepers and entrepreneurs to make money benefited everyone, he argued, because others picked up part of this extra money in the form of jobs or sales or whatever.

Less well known is that Smith himself assumed that selfishness was self-regulating, or at least had some decent limits.

In a second book, The Theory of Moral Sentiments, now little-read but that Smith himself regarded as the more important one, he wrote: "How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortunes of others, and render their happiness necessary to him."
Would that Smith were right. But he wasn't.
Our contemporary contribution to the history of human evolution has been the doctrine that ``greed is good'' and, indeed, that unlimited greed is even better

What a travesty of the truth. Clearly, ‘everyone does not know’ what Richard Glynn claims they do know. I am always suspicious of claims that ‘everyone knows’, whether in newspaper columns, dinner party discussions, debates in pubs and from politicians.

Selfishness and Adam Smith do not go together. If Richard had read Adam Smith in ‘Moral Sentiments’ and ‘Wealth Of Nations’ instead of a few quotations from unreliable sources (Christmas Crackers?) he would know that selfishness is treated critically by Adam Smith.

The notion that selfishness was good came from a earlier commentator, Bernard Mandeville (1670-1733), whose book, ‘The Fable of Bees’, which made him famous, began as poem and was fleshed out to a best seller in various editions, 1714, 1724 and 1731 (it was recently reproduced in an economically priced two-volume edition by Liberty Fund).

Smith’s robust critique of the ‘private vice, public good’ argument is in Moral Sentiments (Book VII). The notion was popularized by a Hollywood script writer in ‘Wall Street’. Smith did not assume that selfishness was ‘self-limiting’ or had ‘decent limits’. He disregarded its utility altogether.

In fact he asserted the opposite. People act in their self interest and the 18th century idea that was not the same as selfishness. Take the famous quotation (Wealth Of Nations I.ii. pp26-7) about seeking our dinner from the ‘butcher, the brewer, and the baker’, which is commonly misinterpreted by people who confuse Bernard Mandeville with Adam Smith (from not having read either or both authors).

Smith’s advice was not to expect our dinner from their ‘benevolence’ (we cannot ALL live on the benevolence of others – who would everybody rely on for their dinner?) – nor by having regard to ‘our necessities’ (surely a selfish notion to think only of ourselves), but to address their ‘self love’ and their ‘advantages’, not our own self love and our advantages, which is an unselfish approach on our part.

In bargaining for our dinner, or whatever, from others the nature of our behaviour is to ‘propose to them: ‘Give me that which I want, and you shall have this which you want’. In short, the practice two-way bargaining, each addressing the self interests of others, and by considering the interests of other people, we address our own too!

On Richard Gwyn’s views about the current moral situation in Canada I have no comment. My objection is only to Richard Gwyn’s ill-informed article is his linking, or rather mis-linking, of his opinions on moral standards to the considered views of Adam Smith, a moral philosopher of distinguished reputation, as expressed in his books, which contain nothing remotely like Richard Gwyn’s assertions.


Blogger Thomas said...

Oh, the simplicity of it all. Even I, a simple paper pusher, immediately distinguish between selfish and self interest. Free to exchange is Smith-o-rific! Come on people, Mr. Kennedy sure is trying to make it easy to have one of those "Ah, Haaa!" moments.

Gavin, does it ever get to the stage you feel it is pointless or do you feel the tempo of the hunt when you snare an errant intellect and give him a scoot in the right direction?

Tom from Texas

8:36 pm  
Blogger Gavin Kennedy said...


Thanks for your observation.

I am an educator and, after 35 years university teaching, I relish the challenges from the majority of commentators, misquoters of Adam Smith,and the present majority of academic economists, but I assume people want to listen and make up their own minds.

When the 'light bulb' switches 'on', it makes the seemingly endless need to comment worthwhile.

I receive private comment from some of those with whom I have crossed swords on Lost Legacy, thanking me for them getting back to basics.

Unfortunately, I sometimes receive the other kind of private mail too.


11:36 pm  

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