Monday, December 08, 2008

Adam Smith Partly Understood

DJ Mitchell’ writes in HERE) writes on “Spirituality and Economics

"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, though he derives nothing from it except the pleasure of seeing it." —Adam Smith, The Theory of Moral Sentiments (1759).

Of the fallacies of modern times, perhaps none is so pervasive and destructive as the belief that capitalism as a system runs on pure greed. "Self-interest" has been redefined as selfishness, and self-benefit is perceived as the only motivation for commerce. Little wonder that we've become a nation led by the greedy, an economy dependent on "hysterical consumerism," a society in which trust is largely relegated to history, and a system of morals in which what is legally permitted trumps what is right.

But Adam Smith, the father of capitalism, told a very different story: "enlightened self-interest" did not mean greed; it acknowledged that a healthy society promotes individual wellbeing. It also recognized a sympathetic desire to help those in need. In other words, at the very root of capitalism is the maintenance of the community of individuals. This includes such antiquated ideas as a handshake as contract, but also the knowledge that a healthy community means better quality of life for everyone who lives there. And, as Adam Smith points out, it means developing charity— giving to those in need just because they need it.

This regard for the wellbeing of others, besides being essential for capitalism to function, brings us to the realm of spirituality: most broadly, concern for that which is outside ourselves. Less broadly, it refers to that which is not material. And in yet narrower (but perhaps most common) usage, it refers to the quest to know God. But this narrow definition should not dissuade us from using the term in its broader sense, as Smith did and as spiritual teachers have for millenia.
“"[A]s we sympathize with the sorrow of our fellow-creature whenever we see his distress, so we likewise enter into his abhorrence and aversion for whatever has given occasion to it. Our heart, as it adopts and beats time to his grief, so is it likewise animated with that spirit by which he endeavours to drive away or destroy the cause of it." —Adam Smith, The Theory of Moral Sentiments.

Action without understanding sometimes has dire consequences for others. A misguided American boycott of products made with Bangladeshi child labor threw thousands of Bangladeshi children out of work, leaving them to starve on the streets. Dutch aid workers had to step in to feed these children. A holistic understanding of the realities in Bangladesh would suggest that, though we object to child labor, it's better than the alternatives currently available.”

I found this post partially encouraging in that it appears to understand certain aspects of what Adam Smith was attempting to report in his life’s work and I am always grateful for evidence of that.

However, I am less sure that the religious, or ‘spiritual’ slant on his work is justified in what Adam Smith wrote, though ‘DJ Mitchell’ is perfectly entitled to his point of view.

I hope to discuss the spiritual issues raised by supporters of various denominations and separate religions on market economies at some time soon, but I should remark in the meantime that Adam Smith in particular, and markets in general are often assailed by proponents of the view that markets are abominations of their view of god’s purposes and therefore against the teachings that they hold sacred, and also that proponents of alternative views that markets are the very embodiment of their god’s purpose on earth.

That they quote from the same source materials (Adam Smith and the Bible) for these contrary views is quite remarkable, though they often show evidence in their dragging of Adam Smith into their interpretations for either view that they have not understood (possibly not even read) Adam Smith’s Theory of Moral Sentiments or his Inquiry in the Nature and Causes of the Wealth Of Nations, and neither are they familiar with the history of the 18th century.

D. J. Mitchell’ seems to have grasped part of what Adam Smith was about, and we should be pleased with that.



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