Judging from the extensive treatment that Adam Smith gave to sympathy in The Moral Sentiments, he viewed it as one of the more important passions. However, he also viewed sympathy as an extremely unreliable guide to moral behavior, sometimes falling short and sometimes exceeding what is morally required. Smith argued that natural sympathy often falls short of what is morally justified by mass misery. In one evocative passage he noted the striking lack of sympathy that a resident of Europe would be likely to have of an earthquake that eliminated the population of China. After expressing “very strongly his sorrow for the misfortune of that unhappy people,” Smith (1759, III, iii, 192–193) commented, such an individual would likely “pursue his business or his pleasure, take his repose or his diversion, with the same ease and tranquility as if no such accident had happened....If he was to lose his little finger tomorrow, he would not sleep to-night; but, provided he never saw them, he will snore with the most profound security over the ruin of a hundred millions of his brethren.” In other cases, Smith believed that people experience sympathy that is completely out of proportion to the plight of the individual one feels sympathetic toward. Smith adds dryly that “we sympathize even with the dead,” who themselves experience nothing. If humans were under the control of their passions, one could expect to observe extreme callousness alternating with remarkable generosity, with little logic or consistency governing the transitions. Returning to the case of devastation in China, Smith (1759, III, iii, 192) asks whether his representative European would be willing to “sacrifice the lives of a hundred millions of his brethren” to save the injury to his little finger. Smith concludes that the answer is “No”: “Human nature startles with horror at the thought, and the world, in its greatest depravity and corruption, never produced such a villain as could be capable of entertaining it.” The impartial spectator recognizes (194) that “we are but one of the multitude, in no respect better than any other in it.”
In The Theory of Moral Sentiments, Smith argues that much economic activity is the product of a forecasting error—people’s illusion that acquiring wealth, possesions and status will make them permanently happy. Smith further believed that the primary purpose of wealth-accumulation beyond a minimal level was not for consumption, but for the social attention. “What are the advantages which we propose by that great purpose of human life which we call bettering our condition?” Smith asked (I, iii, ii, 70–71). “To be observed, to be attended to, to be taken notice of with sympathy, complacency, and approbation, are all the advantages which we can propose to derive from it. It is the vanity, not the ease, or the pleasure, which interests us.”
Smith devotes numerous pages of The Moral Sentiments to describing ways in which the anticipation of status gained was much better than the realization, since pursuit of status can backfire. Indeed, he argues (1759, IV, i, 260–261), even the wealthy and great eventually recognize, albeit long after they can remedy the situation, how little utility the goods they struggled so hard to procure have actually provided.
Because the rich pursue ends that fail to make them happy, Smith (1759, IV, i, 265) believed that they end up being no more happy than the poor: “In ease of body and peace of mind, all the different ranks of life are really upon a level, and the beggar, who suns himself by the side of the highway, possesses that security which kings are fighting for” and “in what constitutes the real happiness of human life, [the poor] are in no respect inferior to those who would seem so much above them.” Indeed, a large body of modern research on the determinants of happiness has quite consistently found surprisingly weak connections between happiness and wealth or income, especially over time or across countries (Easterlin, 1974; Diener, and Biswas-Diener, 2002; Frey and Stutzer, 2002).
Yet while believing that consumption of goods, as well as wealth and greatness, all provide only “frivolous utility,” Smith believed that the productivity of market economy is driven by this “deception”—the misguided belief that wealth brings happiness. As Smith (1759, IV, i, 263–264) notes, “[I]t is this deception which rouses and keeps in continual motion the industry of mankind. It is this which first prompted them to cultivate the ground, to build houses, to found cities and commonwealths, and to invent and improve all the sciences and arts, which ennoble and embellish human life; which have entirely changed the whole face of the globe.”
Indeed, Adam Smith even invokes the “invisible hand”—a term that may be the the most prominent legacy of his work, although it occurs only once in The Wealth of Nations and only once in The Theory of Moral Sentiments—to argue that as the wealthy seek out goods and status that ultimately bring them little pleasure, they inadvertently end up promoting the good of the poor. Here is Smith’s invisible hand (1759, IV, i, 264) in The Theory of Moral Sentiments:
“In spite of their natural selfishness and rapacity, though they mean only their own conveniency, though the sole end which they propose from the labours of all the thousands whom they employ be the gratification of their own vain and insatiable desires, they divide with the poor the produce of all their improvements. They are led by an invisible hand to make nearly the same distribution of the necessities of life which would have been made had the earth been divided into equal portions among all inhabitants; and thus, without intending it, without knowing it, advance the interest of the society.”Adam Smith’s Theory of Moral Sentiments is not only packed with insights that presage developments in contemporary behavioral economics, but also with promising leads that have yet to be pursued. Here we enumerate four of them: the desire to be well-regarded by posterity; negative reactions to being misjudged; mistaken belief in the objectivity of tastes; and sympathy for the great and rich.
Contrary to the sensible notion that one should sympathize with those less fortunate than oneself, Smith (1759, iii, ii, 72–73) argued that there is a natural tendency to experience sympathy for the great and rich:
When we consider the condition of the great, in those delusive colours in which the imagination is apt to paint it, it seems to be almost the abstract idea of a perfect and happy state. It is the very state which, in all our waking dreams and idle reveries, we had sketched out to ourselves as the final object of all our desires. We feel, therefore, a peculiar sympathy with the satisfaction of those who are in it. We favour all their inclinations, and forward all their wishes. What pity, we think, that any thing should spoil and corrupt so agreeable a situation! It is the misfortunes of kings only which afford the proper subjects for tragedy.Smith’s description recalls the outpouring of grief after the accidental deaths of Princess Diana and John F. Kennedy Jr. Popular Magazines like People and US, and similar highly rated TV shows, are filled with stories about where athletes and stars shop, what they eat and wear and the ups and downs of their love lives.
Smith believed both that this sympathy for the rich was a form of corruption based on a moral mistake, and also that it provided an important underpinning for social stability. Smith (1759, I, iii, iii, 84) described the moral mistake in this way: “[T]hat wealth and greatness are often regarded with the respect and admiration which are due only to wisdom and virtue; and that the contempt, of which vice and folly are the only proper objects, is most unjustly bestowed upon poverty and weaknesses, has been the complaint of moralists in all ages.” Indeed, Smith further argued that the “disposition to admire, and almost to worship, the rich and the powerful, and to despise, or at least, to neglect, persons of poor and mean condition...is...the great and most universal cause of the corruption of our moral sentiments.” However, Smith (I, iii, iii) also held that this sympathy was “necessary both to establish and to maintain the distinction of ranks and the order of society.” This sympathy for the rich may help to explain one of the puzzles of capitalism: the failure of the majority democratic societies to impose extremely high taxes on the richest members.
Adam Smith’s actors in The Theory of Moral Sentiments are driven by an internal struggle between their impulsive, fickle and indispensable passions, and their impartial spectator. They weigh out-of-pocket costs more than opportunity costs, have self-control problems and are overconfident. They display erratic patterns of sympathy, but are consistently concerned about fairness and justice. They are motivated more by ego than by any kind of direct pleasure from consumption, and, though they don’t anticipate it, ultimately derive little pleasure from either. In short, Adam Smith’s world is not inhabited by dispassionate rational purely self-interested agents, but rather by multidimensional and realistic human beings.
— Nava Ashraf, Colin F. Camerer and George Loewenstein, Adam Smith, Behavioral Economist
Cilvēkiem Latvijā jāzina, uz kurieni valsts virzās, kāds ir mērķis. Tādēļ būtu vajadzīgs līderis — vadonis. Kā vienu no lielākajiem trūkumiem var minēt to, ka Latvija patlaban ir parlamentāra valsts. Ir vairākas partijas, un nevienai nav izdevīgi, ka kādai citai partijai, kas ir pie varas, veiktos.
— Andrejs Ēķis, Latvijai vajadzīgs vadonis
Russia, in its thousand-year history, has had a tradition of dependency on the leader, on the state, the myth of the state, the worship of the state, the tradition of general utter dependency on the boss, on somebody. The intellectuals are now running around saying we must find our national ideal. Even the president has published some kind of an appeal: "We've got to find the national idea." It's ludicrous. You can't just look for an idea under a mattress or under a bed. Those ideas come out of life. It seems that the society, either they don't notice it or they reject it, that we already have such an idea—the idea of freedom. Freedom, if you will, is the new religion and the new ideology.
— Alexander Yakovlev, Interview: Conversations with History
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