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How to Be Happy with Adam Smith

The Invisible Hand and the Lovely Man

One might expect that a book titled How Adam Smith Can Change Your Life would provide helpful hints for achieving economic success. In particular, if one had just a passing acquaintance with Smith’s concept of the invisible hand, one would expect that Smith would absolve us from all feelings of obligation to others. After all, he famously says in The Wealth of Nations that “Every individual intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his original intention. By pursuing his own interest he frequently promotes that of society more effectively than when he really intends to promote it.” In other words, “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 self-interest.” Outside the family, on the larger economic scale, things work out well when we pursue self-interest. Bill Gates and Steve Jobs have improved the lives of millions of people they never met by pursuing self-interest. So we might expect How Adam Smith Can Change Your Life to tell us how we can do likewise.

But it doesn’t. In How Adam Smith Can Change Your Life Russ Roberts does not focus on The Wealth of Nations, but rather on Smith’s other major book, The Theory of Moral Sentiments. Smith founded the study of economics, but his training and education were in philosophy, and The Theory of Moral Sentiments is very clearly a work of moral philosophy. Part of Smith’s message in this book is that we should not pursue fame and fortune. Why? Because such pursuits and even accomplishments will not make us happy. Tellingly, the subtitle of Roberts’s book is An Unexpected Guide to Human Nature and Happiness.

Roberts and Smith deliver on the implicit promise of the title and subtitle. I must confess that I have not read Smith’s The Theory of Moral Sentiments. Very few people have these days. But having read Roberts’s book, I am now going to read Smith’s neglected classic. In the pages of Roberts’s book, Smith comes across as a brilliant psychologist and theorist of human nature.

Smith’s message boils down to his claim that “Man naturally desires, not only to be loved, but to be lovely.” Self-love is not enough. Humans naturally desire to be loved by others, but we don’t need the whole world to love us. We desire happiness, and, as a necessary part of that we, desire to be loved. When Smith speaks of love he intends a broader sense than we may tend to think of it today. It’s not just about romantic or familial love. Smith means we want people to really like us, care about us, and respect us.

We also desire to be lovely, but again in a different sense. The connotation of the word lovely has changed since Smith’s day. He does not mean that we desire to be physically attractive. We may desire that, just as we may desire to be wealthy—and both will probably make life easier—but neither will make us happy. So that is not what Smith has in mind. By “lovely” he means worthy of being loved. We don’t just want others to love us, but rather we want to have earned that love. As Smith points out, we do not feel at ease in response to an unearned compliment. Nor do we feel happy when our actions are not worthy of the respect of others. Lots of people once thought Bernie Madoff was a great guy and a brilliant investor, but Smith would be willing to bet that Madoff was never happy because he was not lovely.

So what do we need to do to be lovely? Smith thinks we need to cultivate three virtues: prudence, justice, and beneficence. By prudence Smith means taking care of yourself. So don’t eat or drink to excess, and choose wisely in all areas of life. Smith did not think there was much happiness to be found in owning the latest gadgets or achieving fame, and so it would not be prudent to pursue those things. By justice Smith means not harming others. Of course one shouldn’t assault others or steal their property. But lying and even gossiping would be out of bounds too.

Lastly, by beneficence Smith means being good to others. The requirements of beneficence are vague and difficult to determine. Does beneficence demand that I give to every charity that solicits me through the mail? Does it require that I agree to every request for a favor from a friend or colleague? Does it require that I go far out of my way and to great expense to help the homeless? No general answers can be given. With beneficence, it is clear that being lovely is much more an art than a science. Each person must be the artist who makes of himself or herself a lovely work of art. Rest assured, though, that if you are not appropriately beneficent other people will let you know. So it is often prudent to be beneficent.

Scholars debate the question of how to reconcile the views of Adam Smith in The Wealth of Nations with the same man’s views in The Theory of Moral Sentiments. In How Adam Smith Can Change Your Life, Russ Roberts suggests that it is a matter of different spheres. In the larger sphere of commercial society it makes sense to appeal to a person’s self interest, while in the smaller sphere of family and friends it makes sense to appeal to beneficence. I don’t disagree with Roberts, except to the extent that he implies that actions among friends and family result from an entirely different motivation. At the risk of sounding cynical, I would suggest that Smith simply recognizes that different actions are in our self-interest among family and friends than among strangers. It feels good to be beneficent, and often that warm glow is enough reward to help a stranger. But among friends and family we often have an expanded sense of self such that we experience benefitting others as benefitting ourselves. Much more could be said about this, of course.

And much more could be said about the array of Smith’s brilliant insights concerning moral feelings and human nature. For that, though, I’ll leave you to read How Adam Smith Can Change Your Life and maybe The Theory of Moral Sentiments too.

Copyright William Irwin 2014