Friday, November 11, 2011

Difference Between Selfishness and Self Interest For Adam Smith

Getty Lustila, Georgia State University, writes (6 November) in The Partially Examined Life Blog HERE:

David Hume and Adam Smith in the Context of Eighteenth-Century Moral Philosophy, Part 1”

“Moral philosophy in the eighteenth century was principally concerned with three issues. First, was “the selfish hypothesis,” which maintained that all declarations of public interest were ultimately expressions of private interest. Second, was the explanation and justification of moral judgment. And third, was the character of moral virtue.

The selfish hypothesis, though largely a minority view, was defended equally by Thomas Hobbes, Bernard Mandeville. The mechanists considered man to be a machine, one whose parts functioned “every bit as naturally as the movements of a clock or other automaton follows from the arrangement of its counter-weights and wheels.” (Descartes, Treatise of Man, 108; Mandeville, The Fable of the Bees: And Other Writings, 36) Man’s principal commitment to his own self-love undercuts genuine other-regarding action and stymies the opportunity for moral virtue.

David Hume and Adam Smith repudiated this thesis. Hume referred to the self hypothesis as one that proceeded from “nothing but the most depraved disposition.” (An Enquiry Concerning the Principles of Morals, 247) For Hume, the fact that a good amount of people act selfishly a good amount of the time fails to ground the claim that such people always acted selfishly (much less the charge that all mankind act in this way!) Man’s selfishness admits of degrees, something that is obvious to our “common sense and our most unprejudiced notions.” (An Enquiry Concerning the Principles of Morals, 250) In Hume’s estimation, only philosophers—with their love of simplicity in principle—could affirm such an absurd view of human nature as the selfish hypothesis. Likewise, Smith claimed that “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.” (The Theory of Moral Sentiments (Penguin Classics), 1) For Smith, all human beings are naturally ‘in-tune’ with one another through the faculty of sympathy; which, acting as a mirror for others, allows us to take part in their suffering and joy. The ability to sympathize with our fellows is not a virtue (in the traditional sense). Instead, the faculty of sympathy is a constitutive part of human agency: devoid of sympathy, we are not human. Smith and Hume recognize that sympathy is most naturally felt for our family and friends. Nonetheless, they equally affirm that man’s moral sense has developed and expanded through the progress of history; a process that will continue to be realized through his continual interaction with the others, the world, and himself

This is a neat summary of some complex philosophy developed in the 18th century and I am happy to commend Getty Lustila’s article as a good first step to reading the texts that she mentions.

The difference between ‘selfishness’ and Hume–Smithian ‘self interest is mostly misunderstood by those who fall into conflating Smith’s meaning of these words and not just in the modern invention of the IH metaphor, when attributed to Adam Smith (i.e., that selfish actions ‘miraculously’ generate ‘public good’ – which is pure Bernard Mandeville, and Ayn Rand) but also in the misreading of the famous ‘butcher, brewer, baker’ quotation from WN (Book I.ii: 26-7), often commented upon on Lost Legacy.

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Blogger airth10 said...

I can't recall, but did Smith speak much about cooperation, that in order to achieving our own self-interest we have to cooperate with others.

12:47 p.m.  
Blogger airth10 said...

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12:47 p.m.  
Blogger airth10 said...

The other day, out of the blue, I thought of the invisible hand and pragmatism. (Pragmatism is a subject dear to my heart.) I like making connection between things. But they are never untenable or ridiculous. They always seem to make sense, at least where I am coming from, cognitively.

I began putting two and two together, between IH and pragmatism, after reading here that Norm Chomsky got the Smith's interpretation of the invisible hand metaphor right (almost), that businessmen have a bias to invest at home rather than abroad. The bias, aka the invisible hand, Smith concluded, comes from it being easier and safer to invest at home because of legal problems and other hostilities that exist abroad. But Smith made that observation around 1780 when the world of business and commerce was very different, and young.

Today that bias doesn't exist, not in the same way, anyway. But in many respects thank our lucky stars that bias no longer exists because if business people hung on to it as they did in Smith's day nations and the world would be in worse shape. For instance, if US businessmen had solely kept investing in the US, when in the 1970s inefficiency increased, workmanship decreased, while salaries and pensions went up, they would have been throwing good money after bad. The fact that they were not investing in the US was like a wake-up call. The investing abroad instead of at home acted like a rejuvenator, as it still does. Mature nations like the US at a certain point tend to go into decline because they become lazy and complacent. If that bias of Smith day had remained America would be in a deeper decline than it is today because the incentive to do better, that comes from the competition it financed abroad, would not be there.

US investment abroad has also made the world more peaceful and secure. For instance, look at Vietnam, and Japan and Germany before. Today Vietnam is an ally and part of the world, mostly due to the fact it has become a business partner. Had America held onto the bias of just investing at home the world would be a more splintered and dangerous place than it is. The same goes for Britain dropping its bias as it did.

I think the invisible hand has matured and taken the larger world view. Its bias today is pragmatic, to level and integrate the world.

6:19 p.m.  

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