The Wisdom of Adam Smith

Adam Smith, the 18th century Scottish thinker, now feted as “The Father of Economics & Capitalism”, would probably be shocked at how his best known book — The Wealth of Nations — is widely invoked to justify greed in modern trade & business.

He would also rue his other book — The Theory of Moral Sentiments — is largely ignored and not as widely read. He was more fond of this work and possibly thought it to be superior.

‘The Theory of Moral Sentiments’ sounds like a lofty title, but delivers many practical ideas on how to live well — as a roadmap to happiness, goodness & self-knowledge.We may label many of those ideas under various disciplines today, such as psychology, philosophy, behavioral economics etc., which points to the breadth of Smith’s wisdom. The book is an insightful study of man — how we think, act & behave — by an observant & wise man.

Russ Roberts, in his book ‘How Adam Smith Can Change Your Life’, has culled the more interesting parts of this quaint 18th century book, and made it more readable by adding his own lively commentary — a good primer for the beginner.

Adam Smith’s words of timeless wisdom…

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“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.”

“It is not the love of our neighbour, it is not the love of mankind, which upon many occasions prompts us to the practice of those divine virtues. It is a stronger love, a more powerful affection, which generally takes place upon such occasions; the love of what is honourable and noble, of the grandeur, and dignity, and superiority of our own characters.”

Man naturally desires, not only to be loved, but to be lovely; or to be that thing which is the natural and proper object of love. He naturally dreads, not only to be hated, but to be hateful; or to be that thing which is the natural and proper object of hatred. He desires, not only praise, but praiseworthiness; or to be that thing which, though it should be praised by nobody, is, however, the natural and proper object of praise. He dreads, not only blame, but blameworthiness; or to be that thing which, though it should be blamed by nobody, is, however, the natural and proper object of blame.”

What so great happiness as to be beloved, and to know that we deserve to be beloved? What so great misery as to be hated, and to know that we deserve to be hated?”

“The man who applauds us either for actions which we did not perform, or for motives which had no sort of influence upon our conduct, applauds not us, but another person. We can derive no sort of satisfaction from his praises. To us they [his praises] should be more mortifying than any censure, and should perpetually call to our minds, the most humbling of all reflections, the reflection of what we ought to be, but what we are not.”

“It is only the weakest and most superficial of mankind who can be much delighted with that praise which they themselves know to be altogether unmerited. A weak man may sometimes be pleased with it, but a wise man rejects it upon all occasions.”

“…the violence and injustice of our own selfish passions are sometimes sufficient to induce the man within the breast to make a report very different from what the real circumstances of the case are capable of authorising.”

“It is so disagreeable to think ill of ourselves, that we often purposely turn away our view from those circumstances which might render that judgment unfavourable.”

“He is a bold surgeon, they say, whose hand does not tremble when he performs an operation upon his own person; and he is often equally bold who does not hesitate to pull off the mysterious veil of self-delusion, which covers from his view the deformities of his own conduct.”

“This self-deceit, this fatal weakness of mankind, is the source of half the disorders of human life. If we saw ourselves in the light in which others see us, or in which they would see us if they knew all, a reformation would generally be unavoidable. We could not otherwise endure the sight.”

“Our continual observations upon the conduct of others, insensibly lead us to form to ourselves certain general rules concerning what is fit and proper either to be done or to be avoided.”

What can be added to the happiness of the man who is in health, who is out of debt, and has a clear conscience?

“How many people ruin themselves by laying out money on trinkets of frivolous utility? What pleases these lovers of toys is not so much the utility, as the aptness of the machines which are fitted to promote it ”

“The great source of both the misery and disorders of human life, seems to arise from over-rating the difference between one permanent situation and another.”

“Some of those situations may, no doubt, deserve to be preferred to others: but none of them can deserve to be pursued with that passionate ardour which drives us to violate the rules either of prudence or of justice; or to corrupt the future tranquillity of our minds, either by shame from the remembrance of our own folly, or by remorse from the horror of our own injustice.”

“The qualities most useful to ourselves are, first of all, superior reason and understanding, by which we are capable of discerning the remote consequences of all our actions, and of foreseeing the advantage or detriment which is likely to result from them: and secondly, self-command, by which we are enabled to abstain from present pleasure or to endure present pain, in order to obtain a greater pleasure or to avoid a greater pain in some future time. In the union of those two qualities consists the virtue of prudence, of all the virtues that which is most useful to the individual.”

“That kings are the servants of the people, to be obeyed, resisted, deposed, or punished, as the public conveniency may require, is the doctrine of reason and philosophy; but it is not the doctrine of Nature.”

“To those who have been accustomed to the possession, or even to the hope of public admiration, all other pleasures sicken and decay. Of all the discarded statesmen who for their own ease have studied to get the better of ambition, and to despise those honours which they could no longer arrive at, how few have been able to succeed?”

“Are you in earnest resolved never to barter your liberty for the lordly servitude of a court, but to live free, fearless, and independent? There seems to be one way to continue in that virtuous resolution; and perhaps but one. Never enter the place from whence so few have been able to return; never come within the circle of ambition; nor ever bring yourself into comparison with those masters of the earth who have already engrossed the attention of half mankind before you.”

Two different models, two different pictures, are held out to us, according to which we may fashion our own character and behaviour; the one more gaudy and glittering in its colouring; the other more correct and more exquisitely beautiful in its outline: the one forcing itself upon the notice of every wandering eye; the other, attracting the attention of scarce any body but the most studious and careful observer.”

“There is, however, this difference between grief and joy, that we are generally most disposed to sympathize with small joys and great sorrows.”

The man who is made uneasy by every little disagreeable incident, who is hurt if either the cook or the butler have failed in the least article of their duty, who feels every defect in the highest ceremonial of politeness, whether it be shewn to himself or to any other person, who takes it amiss that his intimate friend did not bid him good-morrow when they met in the forenoon, and that his brother hummed a tune all the time he himself was telling a story; who is put out of humour by the badness of the weather when in the country, by the badness of the roads when upon a journey, and by the want of company, and dulness of all public diversions when in town; such a person, I say, though he should have some reason, will seldom meet with much sympathy.”

The prudent man always studies seriously and earnestly to understand whatever he professes to understand, and not merely to persuade other people that he understands it; and though his talents may not always be very brilliant, they are always perfectly genuine. “He neither endeavours to impose upon you by the cunning devices of an artful impostor, nor by the arrogant airs of an assuming pedant, nor by the confident assertions of a superficial and imprudent pretender. He is not ostentatious even of the abilities which he really possesses. His conversation is simple and modest, and he is averse to all the quackish arts by which other people so frequently thrust themselves into public notice and reputation.”

“The thief imagines he does no evil, when he steals from the rich . . . what possibly they may never even know has been stolen from them. The adulterer imagines he does no evil, when he corrupts the wife of his friend, provided he covers his intrigue from the suspicion of the husband, and does not disturb the peace of the family. When once we begin to give way to such refinements, there is no enormity so gross of which we may not be capable.”

“The general rules of almost all the virtues, the general rules which determine what are the offices of prudence, of charity, of generosity, of gratitude, of friendship, are in many respects loose and inaccurate, admit of many exceptions, and require so many modifications, that it is scarce possible to regulate our conduct entirely by a regard to them.”

“The rules of justice may be compared to the rules of grammar; the rules of the other virtues, to the rules which critics lay down for the attainment of what is sublime and elegant in composition. The one, are precise, accurate, and indispensable. The other, are loose, vague, and indeterminate, and present us rather with a general idea of the perfection we ought to aim at, than afford us any certain and infallible directions for acquiring it.”

“The all-wise Author of Nature has, in this manner, taught man to respect the sentiments and judgments of his brethren; to be more or less pleased when they approve of his conduct, and to be more or less hurt when they disapprove of it. He has made man, if I may say so, the immediate judge of mankind; and has, in this respect, as in many others, created him after his own image, and appointed him his vicegerent upon earth, to superintend the behaviour of his brethren. They are taught by nature, to acknowledge that power and jurisdiction which has thus been conferred upon him, to be more or less humbled and mortified when they have incurred his censure, and to be more or less elated when they have obtained his applause.”

The man of system (aka the leader)…..“He seems to imagine that he can arrange the different members of a great society with as ease as the hand arranges the different pieces upon a chess-board. He does not consider that the pieces upon the chess-board have no other principle of motion besides that which the hand impresses upon them; but that, in the great chess-board of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might chose to impress upon it. If those two principles coincide and act in the same direction, the game of human society will go on easily and harmoniously, and is very likely to be happy and successful. If they are opposite or different, the game will go on miserably, and the society must be at all times in the highest degree of disorder.”

Those leaders themselves, though they originally may have meant nothing but their own aggrandisement, become many of them in time the dupes of their own sophistry, and are as eager for this great reformation as the weakest and foolishest of their followers.”

Rich men of great ambition….“They are led by an invisible hand to make nearly the same distribution of the necessaries of life, which would have been made, had the earth been divided into equal portions among all its inhabitants, and thus without intending it, without knowing it, advance the interest of the society, and afford means to the multiplication of the species. When Providence divided the earth among a few lordly masters, it neither forgot nor abandoned those who seemed to have been left out in the partition. These last too enjoy their share of all that it produces. In what constitutes the real happiness of human life, they are in no respect inferior to those who would seem so much above them.In ease of body and peace of mind, all the different ranks of life are nearly upon a level, and the beggar, who suns himself by the side of the highway, possesses that security which kings are fighting for.

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