Liberty: Shaping attitudes toward liberty, choice and responsibility

Boyes speculates, over on Liberty, on the underlying causes for what appears to be a shift in the general attitude toward capitalism and freedom.

In part, he wonders what influence the institution of higher education plays in shaping the underlying belief system of the general population. Dan Klein has analysis that plays into this discussion - http://www.criticalreview.com/2004/pdfs/klein_stern.pdf. He concludes that instructors in the social sciences at the college level are overwhelmingly consist in their selection of government driven policies over market driven policies.

Klein in other work, describes the process by which ideologies govern hiring decisions in colleges, that is faculty who serve on hiring committees tend to select colleagues from institutions similar those attended by the incumbent faculty. This would imply that the newly hired faculty have shared beliefs.

This begs the question of the level of impact or influence that college faculty exert over undergraduates. That is, do the beliefs and attitudes of faculty (who in social sciences at least) appear to be heavily weighted toward pro government/interventionist policies and hostile to market policies driven by liberty and freedom have an impact upon undergraduates? This is an important question and the data that Boyes cites suggests that there is in fact a relationship at work that extends the incumbent ideology to students.

So, to the extent that this relationship exists, a part of the explanation may lie with higher education.

I wonder to what extent the institution of the media plays a role in the pro interventionist ideology that seems to be evolving in the US today? That is, can the various channels of the media be seen to have a predominant ideology in regard to freedom, liberty and choice and, if so, is that ideology pro or anti free market?

Another institution that would seem to play a part in the evolution of attitude is religion. Economic freedom and the resulting growth and expansion of choice and standard of living have been limited to a very few countries. The recent discussion over on CATO regarding modernity points out the central role played by institutions and the apparent change in America in attitude toward capitalism naturally raises the question has there been a change in the institution of religion that may have simulated or supported this change?

The intersection of the two above institutions can be seen here:



Boyes motivates us to consider what factors that have lead to an important change in the informal belief systems in the US that directly and indirectly impact liberty and freedom.

Adam Smith: Moral Philosopher

This 2000 piece by James R. Otteson is worth a read.

Otteson observes about The Theory of Moral Sentiments:

Smith’s analysis of the way in which people and communities come to have common moral standards is intriguing—and, indeed, may in large part be true. This alone would recommend it for serious consideration. But Smith’s examination of human morality reveals a model for explaining the development and maintenance of large-scale human institutions generally—which would mean that the book’s import is yet greater than initially thought. I call Smith’s model a “marketplace model.” Let me sketch it briefly, drawing on the discussion so far.

First, Smith argues that moral judgments, along with the rules by which we render them, develop in the way I have described, without an overall, pre-arranged plan. They arise and grow into a shared, common system of morality—a general consensus regarding the nature of virtue, or what Smith calls propriety and merit—on the basis of countless individual judgments made in countless particular situations.

Second, Smith argues that as we grow from infants to children to adults we develop increasingly sophisticated principles of action and judgment, which enable us to assess and judge an increasingly diverse range of actions and motivations.

Third, what seem when we are children to be isolated and haphazard interactions with others lead as we grow older to habits of behavior; as adults the habits solidify into principles that guide what we call our “conscience.”

Fourth, people’s interests, experiences, and environments change slowly enough to allow long-standing associations and institutions to arise, which give a firm foundation to the rules, standards, and protocols that both set the parameters for the initial creation of these associations and in turn are supported by them. (These “associations” would today include everything from Elks clubs, YMCAs, and Boy Scouts, to the American Medical Association, the National Academy of Sciences, and even the Catholic Church.)

Smith next argues that the development of personal moral standards, of a conscience and the impartial spectator procedure, and of the accepted moral standards of a community all depend on the regular associations people make with one another.

Adam Smith's Lost Legacy

Gavin Kennedy writes:


Smith did not write in favour of “enterprise”; he wrote in favour of “commercial society”. The former is a projection of a modern word onto the past; in fact, he displayed throughout Wealth Of Nations strong suspicions about the conduct of “merchants and manufacturers”.

The entire post is well worth a read and it reminded me of Samuel Gregg's book of the same title - The Commercial Society.

From a review of the book on the Acton site

Gregg explains the centrality for a commercial society of the healthy human attribute of trust. The centrality of trust is found in Adam Smith’s Wealth of Nations. Gregg examines the contributions of Adam Smith’s fellows of the Scottish Enlightenment. In the section Peace and Tolerance, Gregg expands upon the contribution of French philosophers to those principles. He quotes the letter of Archbishop Francois Fenelon of Cambrai to Louis XIV on the destructive impact of his wars. Voltaire, Montesquieu, Constant, and Tocqueville developed the theme of the contribution of commercial society to peace and toleration. Gregg quotes the French classical liberal Benjamin Constant: “It is clear that the more the commercial tendency prevails, the weaker the tendency to war must become.”

The Theory of Moral Sentiments - Part 6

Part 7

Part VI: Of the Character of Virtue. First sentence: "When we consider the character of any individual, we naturally view it under two different aspects; first, as it may affect his own happiness; and secondly, as it may affect that of other people." Concerned about character. Challenge to take care of yourself; prudence depends on communion with impartial spectator.

Podcast 6

The Theory of Moral Sentiments - Part 5

Podcast 5

Two great articles on the invisible hand.
"In Adam Smith's Invisible Hands: Comment on Gavin Kennedy", by Daniel B. Klein. Econ Journal Watch, vol. 6, no. 2, pp 264-279. May 2009.

"Adam Smith and the Invisible Hand: From Metaphor to Myth", by Gavin Kennedy. Econ Journal Watch, vol. 6, no. 2, pp 239-263. May 2009.

The Theory of Moral Sentiments - Part 4

Podcast 4

The Theory of Moral Sentiments - Part 3

This is another in a series of posts anticipating the July 2009 Liberty Fund colloquia dealing with Adam Smith

Part 3 - Duty

Chapter 1 - Self examination

What is required of the individual - that is our own duty. How do we judge ourselves? This section is the most intense application of the impartial spectator.

"The principle by which we naturally either approve or disapprove of our own conduct, seems to be altogether the same with that by which we exercise the like judgments concerning the conduct of other people. We either approve or disapprove of the conduct of another man according as we feel that, when we bring his case home to ourselves, we either can or cannot entirely sympathize with the sentiments and motives which directed it. And, in the same manner, we either approve or disapprove of our own conduct, according as we feel that, when we place ourselves in the situation of another man, and view it, as it were, with his eyes and from his station, we either can or cannot entirely enter into and sympathize with the sentiments and motives which influenced it."

1. View our conduct as we image the impartial spectator would. (This is the only looking glass by which we can, in some measure . . . scrutinize the propriety of our won conduct." III.1.5

2. Praise virtue and condemn (punish) vice.

Chapter 2 - Praise v blame

1. Must deserve the praise or blame by motive and action.

2. Behavior should conform to measure of conduct we know to exist (these are the emergent and evolutionary informal norms and conventions as well as formal institutions)

3. Smith argues we are endowed with a desire to please others and a desire to be pleasing in character.

4. Golden median or place between pleasure and pain. And pain a greater motivator than pleasure.

5. Poets v mathematicians

6. Judgments from society (external) and conscience (internal) - how are these a part of the impartial spectator?

Chapter 3 - Conscience

1. Natural eye of the mind (eye of the impartial spectator)

2. Impartial spectator

3. China example hundred million dead v my pinky - self love countered by reason, principle, conscience

4. Famous perspective (Stoic) act and regard ourselves "as a citizen of the world, a member of the vast commonwealth of nature" III.3.10

5. How to get self command? - page 145 "sentiments of the real or supposed spectator of our conduct."

6. 2 philosophies - whining and melancholy v Stoics

7. Back to a pinky (147) fortitude in the face of scratched finger not the same as lost leg

8. Happiness = tranquillity and enjoyment

9. Misery = discord

10. Man of perfect virtue - page 152

Chapter 4 - Self deceit and general rules

Challenge to self judgment - self deceit

Response - general rules from experience

1. Rules emergent and evolutionary

2. Come from moral faculties, natural sense of merit and propriety

3. Also called general rules of conduct - Hayek

Chapter 5 - Influence and authority of the rules of morality

1. Key point - page 102-3 - course clay can reach a minimum standard, not perfection

2. Is God the ultimate enforcer of these rules of conduct/morality - 165?

3. Basis for moral faculties - reason and/or moral sense

4. WN anticipated on pages 166 - incentive of "success in every sort of business" and 168

Chapter 6 - role of Duty

1. Self interest in "common, little and ordinary cases" - follow the general rules

2. Self interest in extraordinary and important objects"(173) - subject to passion called ambition - this can be very positive.

3. Rules of conduct - grammar v aesthetics that is p175 precise, accurate and indispensable (commutative justice) v loose, vague and indeterminant (distributive justice).


Podcast 4

"Thinking of yourself as being observed, not comfortable place to be. Thinking about it unconsciously all the time. Allows for independence, but founded on dependence of internal spectator which itself is derived from society."

Podcast 1 - Introduction

Dan Klein anticipates the discussion of justice and the famous differences between commutative and distributive justice and the rules that govern each:


Justice

Smith is explicit about that remaining "loose, vague, and indeterminate." Rules like grammar, that are precise and accurate, versus the rules of aesthetics, what critics lay down for what is sublime and elegant in writing.

Everything in TMS except for Smith's demand for commutative justice which he says is precise and accurate and indispensable like grammar--the punishment fitting the crime and that you shouldn't commit crimes that violate property or contract, which are black and white; also adds reputation, shouldn't do something to injure someone's reputation (p. 84 doesn't mention reputation but other times does). Apart from that justice--reserves that justice as justice, means this commutative justice--everything else for Smith is in the category of "vague, loose and indeterminate."

The Theory of Moral Sentiments - Part 2

Part 2 - Merit and Demerit

1. Two types of sympathy - direct (with the actor) and indirect (with the object)

2. Role of government in justice

3. Interesting analysis of resentment and punishment - sentinel example.

4.


Podcast 3

"What is Part II about? Merit and demerit: consequences and effects of actions as well as the motives. Gratitude and resentment, compounded sentiments: the action one is grateful for.

Justice and beneficence, discussed in first podcast: Justice can be enforced with force, whereas beneficence has to be voluntary and free--among equals. Justice like grammar is precise; justice is of a negative nature. You don't praise for getting grammar or justice right; satisfying grammar or justice is not cause for praise or approbation. Beneficence, like aesthetics, is both positive and negative.

P. 82-84, "sacred laws of justice"--some of best writing so far. You think more about yourself than other people do. "Though every man may, according to the proverb, be the whole world to himself, to the rest of mankind he is a most insignificant part of it...". "In the race for wealth, and honours, and preferments, he may run as hard as he can, and strain every nerve and every muscle, in order to outstrip all his competitors. But if he should justle, or throw down any of them, the indulgence of the spectators is entirely at an end. It is a violation of fair play, which they cannot admit of...". "To be deprived of that which we are possessed of, is a greater evil than to be disappointed of what we have only the expectation," discussed last time. P. 87 and following: utility not our primary source of sentiment, but notions of justice are.

I think the sources for Smith's or for Hayek's thinking about spontaneous order would be diffuse. For Smith, I think Mandeville must have been big, as well as his teacher Hutcheson, and probably Hume's economics and other evolutionary tendencies. Ferguson was Smith's contemporary (in fact, it seems they were born nearly the same week), and I wouldn't say Ferguson was particularly influential on Smith. As for Hayek, again, I don't think you can point to a specific source. Surely Menger and Mises would figure prominently in his years up to age 30. I think Hayek first uses spontaneous order in The Constitution of Liberty (1960, 160), and credits Michael Polanyi's The Logic of Liberty (1951) for it. But Hayek addresses the general idea, and refers to Hume and Smith, as early as his 1933 lecture "The Trend of Economic Thinking." Someone, btw, who I think was much more influential up to that time than shows in the citations is Herbert Spencer. I think that a lot people, perhaps Hayek, were influenced greatly by him but didn't cite him because doing so would be politically/academically incorrect."

The Theory of Moral Sentiments - Part 1

This posting continues preparation for the Liberty Fund colloqia dealing with Adam Smith

Part 1 - Propriety

Section 1

Chapter 1 - sympathy

1. Imagination key to setting up process of impartial spectator

2. Need to place ourselves in position of person to determine propriety

3. Dread of death (pain a great incentive)


Chapter 2 - Pleasure in mutual sympathy


1. Moral context that of community/society and therefore part of body politic

2. Pain > pleasure

Chapters 3 and 4 - judge propriety/impropriety of others

1. Golden Mean (page 17) - not moderate but appropriate response

2. Actions judged by cause and effect

3. Key point - page 20 - we judge as proper those things first that we see as true and real, then that have utility, but utility is secondary.

Chapter 5 - amiable v respectable virtues

1. Soft v awful virtues

2. Soft - humanity

3. Awful - self denial (self command?)and self government

4. Perfection of human nature cannot be attained - perfect self command - 25

5. Virtue > propriety (25) - huge distance between admired/celebrated and "merely" approved

Section 2 Passions that have propriety

Chapter 1 - Passions from the body

1. Examples - hunger, sex - need virtue of temperance

2. Passions can come from imagination - love, etc. ..

Chapter 2 - Passions from the imagination

1. Love (33)

2. Great line - page 34 - use reserve when discussing friends, studies, profession



Chapter 3 - Unsocial Passions

1. Hatred, anger and resentment must be brought down to an appropriate level

2. 37 - hatred and anger the greatest poison to happiness

Chapter 4 - Social Passions

1. Amiable passions - love, benevolent affection

Chapter 5 - Selfish Passions - joy and grief


Section 3 - Impact of Prosperity and Adversity on propriety

Chapter 1 - sympathy and joy

"What can be added to the happiness of the man who is in health, who is out of debt and has a clear conscience?" - 45

So, most people, according to Smith are in the above state so there is no real additional prosperity prospect, only potential adversity.


Chapter 2 - ambition "the great purpose of life is to bettering our condition"(50)

Chapter 3 - corruption of moral sentiments

Distinction between getting respect via wisdom and virtue or wealth and greatness (62) and the "great mob of mankind" are motivated and corrupted by the former.


Podcast 2

"Daniel Klein writes:
Pietro, yes, I see great parallel between Hayek and Smith, though Hayek never did any moral analysis like TMS, and scarcely refers to TMS (in fact, hardly any of the epic classical liberals of the renaissance period, say 1947-1990, seem to have much grasp of TMS). You suggest that in TMS Smith is trying to do a 'supply and demand' of sympathy. I'd caution against drawing too strong a parallel between the moral dynamics and market dynamics. Yes there are some important parallels, and exit and innovation play key roles in both, and arguably in both a presumption-of-liberty punchline stems from knowledge's richness and particularism, but, as you note, the moral ecology is without money and prices -- or at least goes much farther beyond money and prices. The "culture market" -- from the arts to the most deep-seated, existential sources of meaning and identity -- really is a lot different from the toothpaste market.

Adam, yes, I think propriety has to do with fit with community norms, customs, rules, while (becoming) virtue with going one better. These, however, are frames of analysis. When we go one better we identify or imagine a higher community, and it is propriety to that higher community that makes for (supposedly) praiseworthy becoming virtue in the frame of the lower community. See for example the "exalted propriety" on p. 192.

Adam, yes, I think Smith has a vision (a hope?) of a moral ecology wherein people are prompted to take an ever more impartial view of matters, and in this way continually approach a better sense of moral aesthetics, perhaps like an infinite sequence that converges toward a limit. Arguable, Smith's impartial spectator is that limit, a being of universalist wisdom. I understand that Kant somewhere says that Smith was his favorite among the British moralists. Remember, "the man in the breast," the conscience, is not the impartial spectator, but rather the supposed impartial spectator, the representative of the impartial spectator, etc.

But we never get close to the limit. Moreover, one might argue that as we go along the limit in fact changes. James Otteson's book Adam Smith's Marketplace of Life (Cambridge 2002) interprets Smith's moral ecology as an invisible hand process.

Eric H., I like your sentence, "Basically Smith is saying that society is protected by imagination." I find that your comment is getting at the notion that the impartial spectator -- in the sense of a being universally emanating universalist wisdom (though with mixed success) -- corresponds somehow to the being whose hand is invisible.

I now better see, John Strong, your point. Yes, when we disagree significantly with someone over deeper beauties (4th source), we typically moderate in the situation, we temper, we show courtesy, maybe showing more respect for him than we would in other situations. We do this partly out of regard for proprieties at the 1, 2, and 3 sources.

Incidentally, I feel that Smith is somewhat partial toward such bargainers, as opposed to challengers. The challenger is respectful to the opponent, but not deferent. The challenger -- think Thomas Paine, Jeremy Bentham, Frederic Bastiat (often), Lysander Spooner, Ludwig von Mises, Murray Rothbard, Thomas Szasz, Robert Higgs -- challenges the opponent's fundamental judgment -- deeper root judgment (hence "radical") -- and doing so challenges the opponent's claim to eminence, and hence challenges the cultural system that confers eminence on the opponent. I find that, at least from our contemporary viewpoint, Smith gives short shrift to challengers.

Adam, regarding the invisible hand of the moral ecology, you write: "communities that approve of destructive behavior will not last long and those that don't will persist." I'm not sure how widely you mean "communities." Say we distinguish between communities within Britain and Britain as but one community within humanity. Within Britain, yes, by and large, to what you say, so long as we confine such communities to voluntary means; the king or civil magistrate, on the other had, might, by other means, do destructive things and prosper by it. At the level of Britain as a "community" among humanity: This very broad "survival of fittest" type mechanism is perhaps more relevant to WN where Smith writes of the stages of society and the emergence of "our present sense of the word Freedom" (WN p. 400). But in TMS, it seems to me that he focuses more on mechanisms internal to a single moral ecology, and ascribes melioristic tendencies to its internal workings. There is very little in TMS that speaks to a successful nation exporting its culture and norms, or morally colonizing its neighbors. And there is little about the global selection of national communities on the basis of the success of their moral ecology -- in fact, at the moment, I can't think of anything along such lines in TMS -- please correct me if I am overlooking anything.

A very important question, in my mind, is the kind of setting TMS is assuming for the moral ecology. Perhaps in some settings the meliorism, the set of moral/cultural invisible-hand mechanisms, is overmatched by counter mechanisms?

Do the invisible-hand mechanisms have the upper hand in the moral ecology of America 2009?"

“Liberty and Responsibility in Adam Smith”

I'm looking forward to the Liberty Fund Colloquia “Liberty and Responsibility in Adam Smith” which runs July 6-12, 2009


READING LIST

Session I: Theory of Moral Sentiments, Parts 1 and 2 (99 pages).

Session II: Theory of Moral Sentiments, Parts 3 and 4 (84 pages).

Session III: Theory of Moral Sentiments, Parts 5 and 6 (70 pages).

Session IV: Theory of Moral Sentiments, Part 7 (78 pages).

Session V: “Considerations Concerning the First Formation of Languages,” Hume’s letter to Smith dated 28 July 1759 (letter #36 in Correspondence, pages 42–44); and Smith’s letter to Gilbert Elliot dated 10 October 1759 (letter #40 in Correspondence, pages 48–57) (33 pages).

Session VI: Lectures on Rhetoric and Belles Lettres, Lectures 2, 3, 6, 8, 11, 21–25, and 28 (72 pages).

Session VII: Lectures on Jurisprudence, B (Report dated 1766), pages 397–462, 471–515, 521–522, 528–535, and 538–544 (144 pages).

Session VIII: Wealth of Nations, “Introduction;” and Book 1, Chapters 1–5 and 6–8, pages 10–56 and 65–104 (86 pages).

Session IX: Wealth of Nations, Book 2, “Introduction,” and Chapters 1, 2, and 3, pages 276–285, 320–329, and 330–349; and Book 3, Chapters 1 and 4, pages 376–380 and 411–412 (70 pages).

Session X: Wealth of Nations, Book 4, “Introduction” and Chapters 2, 7, and 9, pages 452–472, 556–566, 572–577, 586–587, 610–618, 622–627, and 687–688; and Book 5, Chapter 1, and Parts II and III, pages 689–701, 708–716, and 723–729 (85 pages).

Session XI: Wealth of Nations, Book 5, Chapter 1, Article II, pages 758–797 (39 pages).

Session XII: Essays on Philosophical Subjects, “The History of Astronomy,” “The History of Ancient Physics,” and “The History of Ancient Logics and Metaphysics” (pages 33–129) (96 pages).

Session XIII: Essays on Philosophical Subjects, “Of the External Senses” and “Of the Imitative Arts” (pages 135–213) and “Letter to the Edinburgh Review” (pages 242-254) (78 pages).

Book club - Theory of Moral Sentiments - overview

This posting and the subsequent ones dealing with the EconTalk podcast of TMS is to prepare for a Liberty Fund colloqia in July on Adam Smith.

This posting deals with the introduction to TMS and the first podcast.

Introduction to Raphael edition of TMS - pages 1 -52

1. Influence of Stoic philosophy

2. 3 virtues of prudence, beneficence and self command

3. Self command permeates all virtue (great precept of nature)

4. Stoicism permeated range of ethics and social science

5. View nature as a cosmic harmony - informs metaphor of invisible hand - the Stoic idea of harmonious system

6. Impartial (indifferent) spectator - as related to conscience

7. Natural harmony and natural liberty

8. Role of prudence and how prudence works with self command to reinforce moral/ethical behavior

9. Sympathy or fellow feeling

10. Judge the agent's motive not the action

11. Ethics - criterion for determining right action - impartial spectator (preferred by Smith) and utility

12. TMS and WN compliment each other - TMS - argument to understand sympathy's role in moral judgment. WN deals with motives for action - which include self love.

From the first podcast:

"Theory of Moral Sentiments (TMS) first published in 1759, revised, final edition 1790; spanned publication of Wealth of Nations, which was published in 1776. Impression of TMS: richer version of Wealth of Nations. Caricature of Adam Smith is focus on greed and self-interest. By contrast, TMS focuses on a richer set of motivations: fame, glory, guilt, reputation, self-esteem. Is that a good characterization? Moral dimensions of our conduct. Sometimes people feel that there is a tension between the two books. Smith trying to explore moral considerations and understandings, but also engaging in a project to advance them, improve them. Not just social psychology or moral psychology; agenda driven, part of enlightenment movement, sees developments of all kinds around him. Smith sees that he needs to explore natural jurisprudence, includes political economy--what the laws ought to be, proper law, desirable law as opposed to the positive law of each nation. Larger project: exploring the moral sentiments, wisdom, virtue."


Economics and the Ordinary Person: Re-reading Adam Smith

"In his Theory of Moral Sentiments (TMS), he criticizes several philosophical theories of morality for not attending properly to the way moral sentiments are actually experienced. And in both TMS and WN he condemns those entranced by "the love of system," those who want to impose their own vision of how the human world should work on the people who actually live in that world. Smith's account of moral and political cognition is strikingly egalitarian: experts know less than they claim to know, and ordinary people know more than they seem to know, about what will best promote the human good.

This egalitarian view of human cognition provides the essential premise for Smith's arguments against government interference with the economy. Smith's teacher Hutcheson, Smith's rival James Steuart, and many other political economists, did not share Smith's confidence in ordinary people's judgment, and therefore looked to a government where the wise would guide investment, and control the labor- and consumption-choices of the poor. For Smith, by contrast, the decisions made by individuals in their own local situations—all individuals, even the poor and uneducated people regarded with so much disdain by Smith's contemporaries—will almost always more effectively promote the public good than any plan aimed directly at that good. And the decisions individuals make about their own moral problems will also normally be at least as wise as any they would come to if they were guided, morally, by their political leaders.

First, if Smith believes that good philosophical and scientific work should be rooted in common sense, then we should not expect him to approve of an economic science, like the one we have today, carried on in a highly abstract and technical jargon. Nor is his own work written that way. WN was admired in its day for its great clarity, and for its avoidance of detailed calculations in favor of historical narrative.

Second, a moral philosophy rooted in common sense is unlikely to endorse a counter-intuitive view of human nature, and Smith in fact combats the counter-intuitive views of his predecessors and colleagues. This is one reason why he rejects the notion that human beings are thoroughly selfish, put about by Hobbes and Mandeville. But for the same reason he rejects the idea that human beings ever were or ever will be capable of the passionate altruism or patriotism on which utopian thinkers pinned their hopes (Thomas More before Smith; Rousseauvians in his time; Marxists later on).

Third, and perhaps most importantly, Smith's distrust of the ability of "systems"—whether philosophical, religious, or political—to improve human beings goes with a belief that what really provides us with moral education are the humble institutions of everyday social interaction, including the market. The foundation of all virtue for Smith is "self-command," the ability to control our feelings, to restrain our passion for our own interests and to enhance our feelings for others. But we achieve self-command only after the disapproval of others has led us to develop a habit of dampening our self-love. The first great "school of self-command," says Smith, is the company of our playfellows, who refuse to indulge us the way our parents do; when we are adult, the major arena in which we need constantly to attend to the interests of others, and restrain our self-absorption, is the market."

Virtue and vice

Adam Smith underscores the importance of institutional support for natural liberty in The Theory of Moral Sentiments. In discussing character, virtue and vice, he writes:

Vice is always capricious: virtue only is regular and orderly.

In a previous post I described the discussion of TMS by Russ Roberts and Dan Klein over at EconTalk. I recommend a listen - this investment in time will really deepen your appreciation of Smith.

EconTalk Book Club

Dan Klein and Russ Roberts offer a six-part podcast series reading and discussing The Theory of Moral Sentiments (TMS), by Adam Smith.

See the List of TMS Podcasts below for the complete set of podcasts. See also the Links to the Book for various online, in-print, audio, and other media formats for the book.

If you would lik

Theory of Moral Sentiments - Virtue and Natural Liberty

In a system of natural liberty the role of the government is clear and limited in its use of coercion.

Smith writes, perceptively:

The wisdom of every state or commonwealth endeavours, as well as it can, to employ the force of the society to restrain those who are subject to its authority, from hurting or disturbing the happiness of one another. The rules which it establishes for this purpose, constitute the civil and criminal law of each particular state or country.

Smith goes on to outline the character and virtue of the "perfectly innocent and just man" a rare individual indeed. This is clearly the rationale for institutional evolution to shape the behavior of those of use who are not this rare individual.

Smith describes this rare individual:



A sacred and religious regard not to hurt or disturb in any respect the happiness of our neighbour, even in those cases where no law can properly protect him, constitutes the character of the perfectly innocent and just man; a character which, when carried to a certain delicacy of attention, is always highly respectable and even venerable for its own sake, and can scarce ever fail to be accompanied with many other virtues, with great feeling for other people, with great humanity and great benevolence. It is a character sufficiently understood, and requires no further explanation.

Section II Of the Character of the Individual, so far as it can affect the Happiness of other People

General rules

In reading Smith's Theory of Moral Sentiments I am struck by the infuence he played on the idea of emergent and evolutionary order and Hayek's analysis of order and general rules.

It seems clear that these "important rules of conduct" which Smith ties to duty and Hayek to justice have shaped the development of society. In developing countries, these general rules have evolved in such a way to shape wealth enhancing incentives.

Smith writes:

"But upon the tolerable observance of these duties, depends the very existence of human society, which would crumble into nothing if mankind were not generally impressed with a reverence for those important rules of conduct."(http://www.econlib.org/cgi-bin/searchbooks.pl?searchtype=BookSearchPara&id=smMS&query=generally+impressed+with+a+reverence)

Hayek write:

"Men in society can successfully pursue their ends because they know what to expect from their fellows. Their relations, in other words, show a certain order. How such an order of the multifarious activities of millions of men is produced or can be achieved is the central problem of social theory and social policy."

and

"And it is an order which, though it is the result of human action, has not been created by men deliberately arranging the elements in a preconceived pattern. These peculiarities of the social order are closely connected, and it will be the task of this essay to make their interrelation clear. We shall see that, although there is no absolute necessity that a complex order must always be spontaneous and abstract, the more complex the order is at which we aim, the more we shall have to rely on spontaneous forces to bring it about, and the more our power of control will be confined in consequence to the abstract features and not extend to the concrete manifestations of that order."

Source: New Individualist Review, editor-in-chief Ralph Raico, introduction by Milton Friedman (Indianapolis: Liberty Fund, 1981). Chapter: F. A. HAYEK, Kinds of Order in Society

The Invisible Hand

Thanks to Jane Shaw at Liberty and Power for the heads up about a wonderful discussion between Gavin Kennedy and Dan Klein over the meaning and significance of the invisible hand in the Econ Journal Watch

Peter Minowitz concludes his essay, “Adam Smith’s Invisible
with the following words: “Centuries after Smith’s death, we are still struggling
fathom a two-word phrase that stands out in a thousand-page book.”

Gavin's position

Gavin asserts:

The metaphor of an invisible hand is just a metaphor and modern wonder over
its meaning is, well, meaningless.

Klein' response

William D. Grampp contends:

There are nine different interpretations of it that I have seen (which cannot be all of them), and there is a tenth.

the force that makes the interest of one the interest of others,

(2) the price mechanism,

(3) a figure for the idea of unintended consequences,

(4) competition,

(5) the mutual advantage in exchange,

(6) a joke,

(7) an evolutionary process,

(8) providence, and

(9) the force that restrains the export of capital.

from

What Did Smith Mean by the Invisible Hand?
Author(s): William D. Grampp

Source: The Journal of Political Economy, Vol. 108, No. 3 (Jun., 2000), pp. 441-465
Published by: The University of Chicago Press