Wednesday, June 12, 2013

Once More on Adam Smith and Self-Interest


Arturo Cuenllas posts HERE
"Adam Smith said that the best result comes from everyone in the group doing what's best for himself. Right? That's what he said, right? (...) Incomplete. Incomplete, okay? Because the best result will come from everyone in the group doing what's best for himself… and the group (…) Governing dynamics, gentlemen. Governing dynamics. Adam Smith … was wrong!" (From Russell Crowe interpreting John Nash in A beautiful mind.}"
Comment
I have commented on the script writer’s false presentation of Adam Smith’s moral philosophy in the “Beautiful Mind” film on Lost Legacy many times.  It is a totally false notion about Smith on self-interest.  It suited the plot in the film, but not artistic integrity.
Adam Smith did not make such statements attributed to him by the script writer, which are not supported either in Smith’s Theory of Moral Sentiments or in his Wealth Of Nations, and it is a perverse statement to say that Adam Smith said “the best result comes from everyone in the group doing what's best for himself. Right? That's what he said, right?the best result comes from everyone in the group doing what's best for himself. Right? That's what he said, right?”  No, No, No! 
Consider what Adam Smith states early in Wealth Of Nations about “self-interest”:
In civilized society he stands at all times in need of the co–operation and assistance of great multitudes, while his whole life is scarce sufficient to gain the friendship of a few persons. In almost every other race of animals each individual, when it is grown up to maturity, is intirely independent, and in its natural state has occasion for the assistance of no other living creature. But man has almost constant occasion for the help of his brethren, and it is in vain for him to expect it from their benevolence only.6 He will be more likely to prevail if he can interest their self–love in his favour, and shew them that it is for their own advantage to do for him what he requires of them. Whoever offers to another a bargain of any kind, proposes to do this. Give me that which I want, and you shall have this which you want, is the meaning of every such offer; and it is in this manner that we obtain from one another the far greater part of those good offices which we stand in need of. 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, and never talk to them of our own necessities but of their advantages” (WN I.ii.2: 26-27).
Read the above carefully.  To obtain our self-interests of obtaining the ingredients of our dinner (or whatever), we must persuade the “butcher, brewer, and baker” to supply them to us.  Insisting on our self-interest as imagined by the lonesome image of the Hollywood scriptwriter would not secure our dinner  (or anything else) for us.  We must persuade them to supply us; not demand they meet our needs. What about their needs?  What do they do?  Just say in response: “yes, sir, no sir, three bags full sir”?
Indeed, Smith underlines that point by insisting that we must address “their self–love, and never talk to them of our own necessities but of their advantages”.  In short, we mediate our different self-interests by taking into account the self-interests of others.  This is the exact opposite of Arturo Cuenllas’s presentation.
An egoistic non-cooperator would soon starve.  We persuade, bargain, and co-opperate as consumers and suppliers, in and outside the family.  That is why sales training is a multi-million dollar business in market societies.
Adam Smith was not wrong.  He never said “the best result comes from everyone in the group doing what's best for himself”.  In fact, he said the exact opposite, and the contents of both books prove it.

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