Saturday, January 16, 2010

Adam Smith on Earthquakes and a "Man of Humanity"


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Matthew Bishop, US Business Editor of The Economist and Michael Green write for Philanthrocapitalism Blog HERE and have produced, I hope in innocence, what amounts, by implication, so far as their readers are concerned, to a scurrilous slur on Adam Smith:

“Philanthrocapitalism and the Heart Strings”

“Let us suppose that the great empire of China, with all its myriads of inhabitants, was suddenly swallowed up by an earthquake, and let us consider how a man of humanity in Europe, who had no sort of connection with that part of the world, would be affected upon receiving intelligence of this dreadful calamity. He would, I imagine, first of all, express very strongly his sorrow for the misfortune of that unhappy people, he would make many melancholy reflections upon the precariousness of human life, and the vanity of all the labours of man, which could thus be annihilated in a moment… And when all this fine philosophy was over, when all these humane sentiments had been once fairly expressed, he would pursue his business or his pleasure, take his repose or his diversion, with the same ease and tranquillity, as if no such accident had happened. The most frivolous disaster which could befall himself would occasion a more real disturbance.”

Those words, written by the great British economist Adam Smith, seem strikingly wide of the mark at the moment, as millions of people around the world respond with generosity to the terrible misfortune that has befallen the people of Haiti. Twitter and Facebook are churning with tips on how to give and to whom to give. Governments, businesses and individuals the world over are all opening their wallets to help.

Although sometimes caricatured as a champion of selfishness for extolling the power of the ‘invisible hand’ of the market, Smith’s quote comes from his lesser-known work, The Theory of Moral Sentiments, in which he argued that it is our sympathy for others that motivates our good deeds. In the world without telephones and televisions that existed when he was writing, catastrophes on the other side of the world were abstract stories; today, we can see the suffering of others and do something about it. For that reason, Smith would not have been surprised by the way the public has responded to this latest crisis, and would have celebrated this as progress for humankind.

Smith would also have noted with pleasure that a massive earthquake in China in 2008 led to a dramatic change in attitudes to giving there, where the government had previously been hostile to philanthropy. Yet he might also have worried that the economy’s invisible heart led to philanthropic funds being misallocated by the surge of sympathy after high profile disasters, which often attract more money and in-kind gifts than can be used effectively on the ground, at the expense of less compelling but more effective uses of the donations.”


Comment
The above quotation comes from Moral Sentiments (1759) and, unfortunately it is only part of this paragraph that is often quoted by quotation-chasing, media folk in a hurry to make their point when earthquakes are in the news.

‘Tis a pity that Matthew or Michael did not quote the rest of the paragraph – maybe it was only partly quoted from their book of Smith quotations – for they would have gotten a whole new perspective on the Adam Smith they think they knew.

Here it is, right after where their truncated quote ends: “…would occasion a more real disturbance”:

Human nature startles with horror at the thought, and the world, in its greatest depravity and corruption, never produced such a villain as could be capable of entertaining it. But what makes this difference? When our passive feelings are almost always so sordid and so selfish, how comes it that our active principles should often be so generous and so noble? When we are always so much more deeply affected by whatever concerns ourselves, than by whatever concerns other men; what is it which prompts the generous, upon all occasions, and the mean upon many, to sacrifice their own interests to the greater interests of others? It is not the soft power of humanity, it is not that feeble spark of benevolence which Nature has lighted up in the human heart, that is thus capable of counteracting the strongest impulses of self-love. It is a stronger power, a more forcible motive, which exerts itself upon such occasions. It is reason, principle, conscience, the inhabitant of the breast, the man within, the great judge and arbiter of our conduct. It is he who, whenever we are about to act so as to affect the happiness of others, calls to us, with a voice capable of astonishing the most presumptuous of our passions, that we are but one of the multitude, in no respect better than any other in it; and that when we prefer ourselves so shamefully and so blindly to others, we become the proper objects of resentment, abhorrence, and execration. It is from him only that we learn the real littleness of ourselves, and of whatever relates to ourselves, and the natural misrepresentations of self-love can be corrected only by the eye of this impartial spectator. It is he who shows us the propriety of generosity and the deformity of injustice; the propriety of resigning the greatest interests of our own, for the yet greater interests of others, and the deformity of doing the smallest injury to another, in order to obtain the greatest benefit to ourselves. It is not the love of our neighbour, it is not the love of mankind, which upon many occasions prompts us to the practice of those divine virtues. It is a stronger love, a more powerful affection, which generally takes place upon such occasions; the love of what is honourable and noble, of the grandeur, and dignity, and superiority of our own characters” (TMS III.3.5: 136-37).

I suggest this shows a different take on Adam Smith’s insightful comment on how “a man of humanity” would react to an earthquake in distant China (then a year’s sailing from Britain and the same back).

Yes, the world has grown smaller today, but the same human spirit, extolled by Smith, is evident in what follows in the near-by Caribbean. I would wish that Matthew and Michael would spread that message about Adam Smith’s legacy on such occasions.

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2 Comments:

Blogger Maxine Udall (girl economist) said...

Thank you.

2:58 pm  
Blogger Nicholas said...

Just saw this while I looked for a good Smith comment to counter a Randian. Smith was such a better man than Rand. He understood that individualist capitalism could be used (rightly) for the common good. And he was able to pull this off without sounding soft.

6:45 pm  

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