The intellectual heirs of Adam Smith have two battles to fight. The first is to rescue the free market from mercantilism and central planning and the second is to rescue our moral sentiments from intellectuals who think they are inefficient and overly sentimental.
Catallaxy’s Andrew Norton should know better than to enlist Adam Smith in his efforts to reform popular moral sentiments. In a recent post he claims that:
Liberalism is a philosophy of body rather than soul; what you do is more important than why you do it. Still the most famous statement of this stance is Adam Smith’s:
"It is not from the benevolence of the butcher, the brewer, the baker, that we expect our dinner, but from their regard to their own self-interest."
Norton thinks that people should stop making distinctions between charitable donations which are made out of concern for victims of natural disasters and those which are made out of self interest. Presumably self interested donors should also stop making distinctions between sincere praise for their actions and empty flattery designed to encourage them to continue giving.
Adam Smith would not have agreed with Norton’s argument. In The Theory of Moral Sentiments he argued that people want to be loved and respected by others and also want to be worthy of love and respect. Smith would not have been surprised by the way Australians responded to the Indian Ocean tsunami. He would have expected that many people would have made large donations to the Red Cross or Oxfam and not told anyone about it.
But at the same time Smith would not have expected people to give out of compassion or benevolence:
Let us suppose that the great empire of China, with all its myriads of inhabitants, was suddenly swallowed up by an earthquake, and let us consider how a man of humanity in Europe, who had no sort of connexion with that part of the world, would be affected upon receiving intelligence of this dreadful calamity. He would, I imagine, first of all, express very strongly his sorrow for the misfortune of that unhappy people, he would make many melancholy reflections upon the precariousness of human life, and the vanity of all the labours of man, which could thus be annihilated in a moment. He would too, perhaps, if he was a man of speculation, enter into many reasonings concerning the effects which this disaster might produce upon the commerce of Europe, and the trade and business of the world in general. And when all this fine philosophy was over, when all these humane sentiments had been once fairly expressed, he would pursue his business or his pleasure, take his repose or his diversion, with the same ease and tranquillity, as if no such accident had happened. The most frivolous disaster which could befal himself would occasion a more real disturbance. If he was to lose his little finger to-morrow, 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, and the destruction of that immense multitude seems plainly an object less interesting to him, than this paltry misfortune of his own (Part III chapter III).
Smith would expect people to donate after the tsunami – but not out of compassion. He argued that conscience can be more powerful than self-love. As he went on to say: "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."
Conscience, according to Smith, reminds people that a person who puts the greater needs of others above their own less important needs (eg sacrificing a weekend away in order to save the lives of tsunami victims) is more worthy of esteem than a person who acts out of selfishness. By acting according to their consciences people are able to feel pride and avoid shame. A person "desires, not only praise, but praisworthiness; or to be that thing which, though it should be praised by nobody, is, however, the natural and proper object of praise" (Part III chapter II)
Smith also acknowledged that people did want the love and esteem of others. But if people suspect that they are being flattered rather than praised the words lose their value. Just as there is no point in paying someone to say they love you and think you’re attractive, there is little point in donating money in return for flattery (both inferior substitutes for the real thing).
For Smith motives mattered. We shouldn’t praise a celebrity who donates large sums of money in the hope that the extra publicity will help them make it back with interest. Nor should we esteem a business person who donates because appearing stingy or heartless would be bad for sales.
An individual’s conscience may be a powerful motivator but that doesn’t mean it doesn’t need support from the praise and blame of others. Norton thinks we should forget about motives and conscience and focus on self-interest alone. Smith would have argued that this would eventually debase the currency of praise and blame and undermine our moral sentiments.
Norton’s liberalism is a constitution for a society of psychopaths.