Adam Smith is considered the founder of modern economics
for several reasons.
He seems by temperament to have been well suited
to be an absent-minded professor
walking from Kirkaldy to Dumfermline in his dressing gown
while he was thinking about something
or in animated conversation with a colleague
and falling into a tanning pit.
These are the kinds of fits of abstraction
that show how deeply focused
on creation of ideas and new knowledge Smith could be.
He views man as a social being
and his life's work was devoted to
developing a coherent theory of this systematic understanding
of man's nature as a social being and how humans operate in society
In Theory of Moral Sentiments in 1759
he lays out the foundations of that systematic science of man
starting with moral philosophy and human nature.
He grounds his idea of moral philosophy
in something that he characterizes as sympathy
which was a very hot topic among Smith and his friends
David Hume, Adam Ferguson, Francis Hutcheson in the 1750s and 60s.
Sympathy for Smith combined empathy
the emotional connection, emotional interconnectedness
that we feel with other human beings
with the judgement and evaluation
of individuals' behavior, in particular, situations.
Smith definitely argues
that individuals make decisions and make choices
based primarily on self-interest.
But his definition of self-interest is very broad.
Smith's definition of self-interest includes this idea of sympathy
and mutual sympathy and the fellow feeling
that you feel with others who matter to you
or even some of the small things like the slight smile you get
from the stranger when you pass them on the street.
But he also recognizes, and this is a time when
Smith is writing with folks like Rousseau and Hobbes as counterpoints
that other scholars are arguing that selfish desires can harm
and injure other people.
In the Theory of Moral Sentiments, he has to confront this question
of how do we contain the selfish desires of individuals
that may injure others while still enabling individuals to thrive.
He develops a very interesting psychological metaphor
called "the spectator"
and the idea is to think of the spectator
as an observer of your behavior
observer of the behavior of others.
So, in part, when you're observing someone take a decision or action
part of you is judging that action and that's your spectator
and you judge that action based on your sense of what's proper.
We also use that spectator according to Smith
to evaluate our own actions and that's how we have
self-contained mechanisms and dynamics for controlling our selfish desires.
But our internal spectator is, by nature, going to be very partial.
Although perfect impartiality, Smith would say,
as a Scottish enlightenment empiricist
perfect impartiality is of course impossible
but that should be the goal.
One of the most important distinctions that Smith draws
in the Theory of Moral Sentiment
is the distinction between justice and something he calls beneficence.
Beneficence is just benevolent activities
towards others without any sense of any repayment or reciprocity
or benefit to yourself.
Smith argues that justice, which he defines as commutative justice,
both in formal social norms and formal laws and rules
that protect the negatively-defined rights
to individuals to be free from harm to life, liberty or property.
Those institutions of justice are very important
in fact, they're necessary for humans to live together in civil society.
When Smith argues that justice is necessary
for people to live together in civil society
but beneficence is only nice
he is arguing that the absence of justice would mean
that it's a society that has injustice.
Whereas if you have a society without beneficence
it's not necessarily a pleasant society
it's not one that people would really want to live in
but it's not one that is characterized by injustice.
So, for him, justice is the primary important
institutional moral foundation of living together in society.
So this will feed into his argument
that the most important fundamental role of government
should be to protect those negatively-defined natural rights
and therefore to provide rules and enforcement rules
to uphold a system of justice.
And any government involvement in what we would call beneficence
is unnecessary and, he would argue, could positively be harmful
because it could crowd out, to use a modern term
crowd out more beneficent behavior and benevolent activity
on the part of other individuals.
These formal and informal institutions
grounded in the fact that man is inherently a social being
and that we, as humans, strive for sympathy and mutual sympathy
disciplined by the existence of that spectator
which we try to make as impartial as possible
and that our social norms and our laws feed into that impartiality
that's his vision of the moral underpinnings
of a free society of responsible people
living together peacefully and harmoniously.
One of the most interesting passages
in the Theory of Moral Sentiments
comes fairly late in the book
and it picks up on these themes
where Smith is exploring
how these institutions emerge
and how civil society can emerge spontaneously
by which I don't mean quickly
I just mean can emerge without some kind of hierarchical
top-down creation or design.
He's exploring these themes throughout the entire work
and, in the course of this, he has a fascinating passage
where he explores what happens
when someone who has very good intentions
and wants to come in and has a vision
for how to make the world a better place
how this person can try to implement that vision
through political means, political processes.
This person, he calls "the man of system."
Clearly, Smith thinks "system" is a good thing
he's trying to set up a systematic science of man
but, the man of system he cautions us against
because the man of system looks on and approaches
the other individuals living in society
as Smith says
as chess pieces on a chess board
and the man of system who comes with this vision
of how to create a perfect civil order
tries to institute rules to move these people around
like pieces on a chessboard.
It's very important that our civil institutions
be they formal or informal
respect the fact that those chess pieces
individuals living together in society
have their own laws of motion
and that that is something that should be respected
in the system of institutions
that will enable us to live harmoniously together.