Truth and the Transcendent Business

Here is an essential summary offered by Smith, “And hence it is, that to feel much for others and little for ourselves, that to restrain our selfish, and indulge our benevolent affections, constitutes the perfection of human nature; and can alone produce among mankind that harmony of sentiments and passions in which consists their whole grace and propriety. As to love our neighbor as we love ourselves is the great law of Christianity, so it is the great precept of nature to love ourselves only as we love our neighbor, or what comes to the same thing, as our neighbor is capable of loving us.” Smith is right on with both our natural self-interest and our natural concern for others, but he bases our concern for others strictly on the affinity of one another’s passions or sentiments; even placing our morals and sentiments in the hands of our imperfect neighbor and restricting our imperfect selves to a moral responsibility to “only as we love our neighbor;” or worse yet, “as much as our neighbor is capable of loving us.”

This is not a very high bar without another influence, and certainly an unstable moral foundation given our tendency toward self-deception and skewed love for the rich, famous, and powerful.

Smith makes this statement that reveals his basis for determining actions to be considered moral. “When we judge in this manner of any affection, as proportioned or disproportioned to the cause which excites it, it is scarce possible that we should make use of any other rule or canon but the correspondent affection in ourselves.”

No need for any other “rule or canon” leaves morality to be determined by ourselves and the extent to which our sentiments dance with and agree to the sentiments of others.

Do you see the lack of a moral keel here?! Certainly, without the regimen, if not the heart-felt compassion and mercy for the world emboldened and embodied by the Christian faith and the Church, we would find it scarcely possible to make use of any other set of rules for determining the appropriateness of another’s actions as suggested by Adam Smith. With all due respect, I contend that herein lies Smith’s folly.

Let’s bring this discussion of Smith’s morality and virtue home to free market economics and business; the topic for which Smith is most well-known. There’s almost nothing about altruism or kindness or compassion or serenity or loveliness in The Wealth of Nations. Similarly, there is almost no defense of commercial life in The Theory of Moral Sentiments. Smith does concede in the latter, though, that great benefits for others can result – ambition induces us to strive, to innovate, to improve, to accumulate, to produce. In Smith’s view, while we greatly exaggerate the benefits of accumulating wealth for our own happiness, ambition is what created agriculture; it made human beings create cities, and led us to discover the great truths of science and the arts and to “embellish human life.” “When Providence divided the earth among a few lordly masters, it neither forgot nor abandoned those who seem to have been left out in the partition. These last, too, enjoy their share of all that it produces.”

Smith believes that the consequence of capital deployed in the interest of ascending to wealth and fame, though a vain and empty pursuit, benefits those within its wake; namely employees, laborers, trading partners, and society itself. This is a prophetic reference to trickle-down economic theory.

The modern calculus of economics, though, that looks at quantified benefits and costs only, is a flawed calculus. I believe Adam Smith would be offended that today’s economic man would ignore the cautions and insights provided in The Theory of Moral Sentiments. In many ways, his cautions were a harbinger of what we see today in business: an unhealthy worship of the rich and famous, an unbridled pursuit to mimic and achieve that lifestyle, and business actions passively endorsed by an amorphous morality that is defined by the masses who own and occupy the cultural megaphones. This amorphous morality in lieu of a fixed set of moral rules is Smith’s folly.

Though a proponent of free markets and economic freedom generally, Smith was not an anarchist or a doctrinaire libertarian. He was a classical liberal, meaning a liberal in the original use of the word – someone who valued liberty and favored limited government. It is unlikely he could have foreseen the denigration of cultural norms to the point where tolerance is the great religion of modern times. Today, we all bow to it in ways that Smith would have found surprising. “Shocking” may be a more appropriate descriptor here; adding unforeseen weight and color to his folly.