Adam Smith Never Believed That "Greed is Good" and Economics Students Who Act As If They Should Be Greedy Are Woefully Misled By Their Tutors
Thomas Mucha, editor of Global Post, with an MA from Chicago, writes a report on why “Economists are horrible, horrible people. So says science”
“In short: economists don't feel bad about acting in their self-interest because — well — the economic theories tell them that they should be selfish.”
I wonder to what extent this bold assertion is a product of Chicago economics, post-Samuelson, who was a student there in the 1930s, and also the product of several decades of advancing the theories of “self-interest” as being an endorsement of “selfishness”? There are daily reports across the media and throughout academe of direct statements to that affect from mainstream neoclassical economics, complete with endorsements of this mistaken theory allegedly based upon the writings of Adam Smith in Wealth Of Nations. The "Greed is Good" theme played well until recently and gave legitimacy to this tendentious and immoral, view of economics, even though credit as the source for such ideas belongs to Ayn Rand, and not to anything written by Adam Smith.
I accept the bold treatment of the specific research among behavioural theorists, though I can question, what in my view are the tendentious assertions made by neoclassical economists often identified as the source of assertions lauding the unintended benefits of selfishness. The claim that selfishness leads to public benefits (which we can trace to a view advanced by Samuelson in 1948) is not found in Adam Smith.
Empirically, the high scores in the survey of current economics students that consistently differ (marginally) from other students are certainly indicative of real differences between them, either in their pre-dispositions in general attitudes (causing some students to avoid the subject) and in their post-course, learned differential dispositions from what they are taught (“maths makes economics a hard science”).
I can think of several causes of such dispositions, such as the need in modern neoclassical courses for prior ability in maths to do well in the subject, lauded by proud faculty as the necessary gateway to tenure and high, post-graduation salaries in business. But if the “selfish = self-interest” fallacy is embedded in the “hard science” presumption then the supposed association reinforces the difference between the participants in the survey.
However, the view that ‘selfishness is consistent with Adam Smith on “self-interest”’ is manifestly unwarranted and is not supported by anything that he wrote in any edition of “Moral Sentiments” (1759) or in “Wealth Of Nations” (1776). If you think you know differently, please feel free to post a comment to that affect.
The claim that Adam Smith ever said anything in praise of “selfishness”, even in a pragmatic and regretful acceptance of it, is wholly unwarranted. Unfortunately such notions are widespread in US academe, particularly since Samuelson’s textbook, “Economics: an analytical analysis”, was first published in 1948, p 36 (McGraw-Hill) and in its 19 editions to 2010 and was studied by 5 million students, few of them who read or thought about Adam Smith. (See Kennedy, G. 2010. “Paul Samuelson and the Invention of the Modern Economics of the Invisible Hand”, History of Economic Ideas. Vol. xviii, no. 3, pp 105-19).