Continuing Conversation... Vernon Smith on Adam Smith and the Human Enterprise
By Amy Willis
Nobel laureate Vernon Smith joins EconTalk host Russ Roberts this week on EconTalk to discuss Adam Smith’s approach to economics and human behavior.
And now we’d like to hear from you…Use the prompts below to share your reactions to this week’s conversation in the comments. Or use them to start your own face-to-face conversations, and let us know how it goes.
1. What is the Max U approach to economics, and what does Vernon Smith mean when he says it works perfectly well, but only for “hamburgers and haircuts?” What kinds of goods does Max U struggle to deal with according to Vernon Smith? How does Adam Smith’s approach compare to Max U?
2. Vernon Smith describes Adam Smith’s “stoic axiom of self-love.” What does this axiom entail, and what does it suggest about human motivation, according to Vernon Smith?
3. Vernon Smith argues that The Theory of Moral Sentiments is “all about the rules.” What sort of rules does he have in mind, and how do they govern human social behavior? What are some examples you’ve witnessed of such rules in action?
4. Vernon Smith argues, perhaps counter-intuitively, that man’s tendency to truck, barter, and exchange, or his experience in markets, leads to specialization, not the other way around. How does his allow one, according to Vernon Smith, to differentiate between the street porter and the philosopher, though each began as fundamentally equal?
5. Are Max U and Smith’s emphasis on rules really orthogonal? Put another way, how do you reconcile Adam Smith’s approach in The Theory of Moral Sentiments with his approach in The Wealth of Nations?