|Intro. Book Club, schedule. This week, standalone discussion with key points.
|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. Applications of human behavior. Wealth of Nations (WoN) in a way is the virtue of the statesman. Also speaks to the conduct of the business person. WoN is most important ever moral authorization for the honest pursuit of profit, for commercial behavior. Shouldn't feel guilty about pursuing honest profit or speak ill of your neighbors for doing so; speaks to the legislature: let people pursue honest profits in this way. Fancy the idea that Smith's moral authorization was significant in the extent to which the industrial revolution arose so rapidly and successfully, explosion that follows his death. Moral authorization matters, culture matters.
|Roadmap: WoN is part of a larger project that TMS is the umbrella for; dimensions of moral approval, sources of moral approval, how do we judge actions of our fellow; Smith's idea of justice, precise and vague rules, beneficence. Continuing with larger project: In WoN, Smith gives moral authorization for the businessperson for honest profit, but to give moral authorization, you better have a theory of morals. In that sense, TMS is the umbrella. What are people really motivated by? Thomas Sowell's book, A Conflict of Visions, contrasts someone who thinks mankind can be perfected versus Smith's emphasis on imperfection and a just system is based on that. What constraints and laws we expect to be successful and desirable? Distinction between what human beings are and a project, exhortation, of what you should do, is almost a false dichotomy because Smith argues that what human beings are are beings looking for exhortation, looking for moral guidance, assessing and reviewing their own moral action. Smith has got this cultural agenda but sees it as his take on what our wisdom is, what wisdom is, what our desirable future is. "Is" and not "ought": aspiration is part of what human beings are. In more modern terms, distinction between individual and collective action. Each of us individually may have an idea of what is the good, proper, right behavior. Getting us to coordinate or be coordinated to achieve good outcomes en masse is a different enterprise. Role of statesman, leader, body politic. In TMS, the individual is in society, not apart from society. Stoics. Part learning, part instinctual; possible to read a lot of Hayekian evolution into Smith. Whether Smith is that sincere when he speaks of God--equivocal, cloaked. Not clear that he sees the need for the invocation of God--a practical need. Not clear that the notion of a benevolent designer is asserted out of anything more than convention rather than anything of what he says depends on that as opposed to a more evolutionary take, which is not designed but morality and beauty that mimic as if there were a designer. WoN as an application of larger enterprise. It's not that TMS lays out what is moral. Vague, mysterious wherein morality, propriety exists. 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 and indeterminate." Even prudence, not just beneficence, generosity, he considers loose, vague and indeterminate. Dierdre McCloskey speaks of max-U (utility maximizing) theorizing as prudence only; more like a grammar in economics. Maybe not prudence in Smith's sense: more of the everyday use than Smith's wider use of the term. Is it prudent to buy Treasury securities today? Who knows? Loose, vague, and indeterminate. Not a bright line.
|Close connection between TMS and WoN. TMS is not pitched as a political book. Interactions it focuses on are between neighbors, equals. As of the 4th edition of TMS, he added a lengthier subtitle: "The Theory of Moral Sentiments, or An essay towards an analysis of the principles by which men naturally judge concerning the conduct and character, first of their neighbors and afterwards of themselves." Your neighbors and yourself. People in civil society, day-to-day life. Some might object to the political reading we are giving TMS. Legitimate to draw these implications. He never says it explicitly in his book, but he wants a society of equals, egalitarianism; promoting that, putting society along those lines, de-governmentalize, de-politicize; where virtues reside and best flourish. Some pieces of the book explicitly address politics: par. about the superior, p. 81. Aside, leaves door open to overruling by the superior. Speaks of civil magistrate, could violate commutative justice; expedience. Smith wants to keep these exceptions as exceptional, serious about commutative justice. Liberty principle: if government always had to abide by that, they could never force people to do things with their person or property that people didn't want to do; couldn't tax or regulate. Other parts speak of politics: "man of system" example; Quote. pp. 233-234. Goes on to say that as long as the magistrate doesn't do anything too opposed, things go on harmoniously. When it tries to push people around, get disorder. Part VI was added 1790, surely written in light of what was going on in France, French Revolution.
|Talk about the dimensions--sources--of moral approval. Smith gives four. Consider the actions of someone's neighbor, Jim, building a shed. In judging Jim's behavior we consult four sources or dimensions of moral approval: p. 326. First, sympathize with motives of the agent--if Jim is being neighborly, we sympathize with his friendliness, beneficence, generosity. Second, enter into the gratitude of those who receive the benefit of his actions--we appreciate the neighbor's gratitude. Difference between walking over with a cup of sugar and putting up a barn. We are aware of the recipient's gratitude. We can envision someone putting up a barn when the recipient doesn't even want the help; we can understand that. NYTimes article, Vice-President Biden's relationship with President Obama: Obama orders lunch for Biden, picks out menu so that Joe Biden is eating healthy. Presumption is that that's beneficent and Biden is grateful; but maybe recipient is not so grateful. Third, we observe that Jim's conduct is agreeable to the general rules by which those two sympathies generally act--recapitulation; perception of agreement or disagreement of any action to an established rule. The interactions are proper to the setting, the occasion. Example: Suppose in a court a judge has someone in for a violation, some kind of crime. Then, overwhelmed by compassion says he's going to relent and not do these punishments. Beneficent in some sense, and the guy on trial would be grateful, but it's not proper to the situation. In the same way, the baker, the butcher, the brewer, it's not proper to appeal to their beneficence. Maybe would in another context, but to do it on the floor in the bakery when there are customers around. Not according to the established rule of the setting. Jim the baker is your neighbor and you say you are laid off and ask for some bread in private is different from doing it when there are customers around. Pharmaceutical companies asked to give away their products charitably; they may want to have some charitable roles but have to segment it. Can't confuse the focal points of everyday interaction. First three: motivations and intentions of Jim, feelings of those on whom Jim acts, and properness to context. Fourth throws it wide open: making a part of a system of behavior that tends to promote happiness for individual or society, derive beauty from this utility outside of these first three, as from a well-contrived machine. Have to think about how this fits into the grand scheme of things, long-term consequences, precedents, unseen or unintended, big view. Commerce and honest profit: benefits redound to people downstream; Smith wanted that seen and to morally authorize honest profit because of that fourth source. Farmer, baker is doing more than just the immediate, seeable things.
|Fourth source, price-gouging example: a restriction in the aftermath of a natural disaster arising from idea that it is immoral to charge a premium in those circumstances. Smith: if you create a climate where you are unable to recoup your inventory costs, when you've stored up stuff in the possibility of a disaster, you'll have long-run consequences if you preclude charging a premium. In the market, we do things by custom; in 1770s maybe even stronger connection. Sources 1, 2, and 3 may be by custom; source 4, Smith says we have to let it be unregulated, let speculators speculate in a famine, etc., because if we don't, people won't show foresight needed in the future. Smith goes on to write the WoN, illustrating that fourth source. People need a lot of instruction about it; people don't understand the unseen, to use Hazlett's or Bastiat's metaphor, and will go too much on 1, 2, and 3. Could argue socialism is an attempt to use 1, 2, and 3, ignoring 4. Unintended consequences. Not socialism: Impetus of the political process to impose short-run regulation to help people is a natural impulse, but ignores 4. Even says people are poor in these areas and need instruction. There is no single algorithm here, no weights, no magic formula, hence loose, vague and indeterminate. Inter-relate: whether we sympathize in source 1 with the motives of the agent may depend on how much economics we know, what we've learned to think of as propriety in individual behavior. Someone who harms neighbor in a way that harms neighbor and creates resentment: is that a moral act? The person meant well. Smith: you can't just judge it on the basis of the motives of the actor. Idea that you would create a dependency or ignore the knowledge of your neighbor's situation such as his preferences at lunch, changes it from a moral act to an immoral act. Want to weight how much harm, how much he should be expected to know the neighbor's situation would change the morality. Smith plays up knowledge of situation. Think about politics and what goes wrong. Government often blinds itself to the bad, indirect consequences of the fourth source. These four sources need to communicate with each other, free, candid flow. More cultural consistency or cohesion in what gets done and how we all think about it. People who want a free society want a better world not only materially, but culturally. Politics affects that.
|Challenge, cultural effects. Charles Dickens as an antagonist to some of this. Writing in first half of the 19th century, 75 years after Smith's WoN and TMS, caricatures a capitalist view of character of Gradgrind, in Hard Times. Famous paragraph: everything can be reduced to money. Gradgrind is max-U, homo-economicus, the green eyeshade of calculation, and is despicable. Countering the moral authorization invoked on Smith's behalf. Customer acting in customary, evolutionary way in norms of commerce. Smith saw those as enlightening; Dickens sees them as degrading, sees pursuit of honest profit as degrading and dehumanizing. Smith's followers and Smith don't make their case very well. Smith saw the mutual benefits of voluntary exchange as enhancing society, morality to those transactions. Correct? Smith really is a comparitivist, asking what are our alternatives: to embrace voluntary principle and let people do it, or alternatively try to restrict it. Maitland: not the emphasis on the invisible hand, as in universal harmony works out, but that the alternative has such bad problems of its own. Does talk about how government is misled by interest groups, but says there are alternatives out there. Classical liberalism, presumption on liberty; not really so beautiful, Dickens has a point, breakdowns of community. More like this is the way its going, go with the flow. Commercial society is coming, Scotland; probably more on the way, go with the core of it which can work out well, accept the fragmentations it will bring with it. Learn to love McDonald's--not that you have to love their hamburgers but love seeing it on the corner so people have that option. Idaho potato farmers get up early so that New Yorkers can have potatoes; beef ranchers. How much potatoes and beef would make its way to NY if you had to rely on the beneficence of these farmers and ranchers? Not too much. Given Smith's four sources of approval, maybe there would be less beef and potatoes but maybe it would be a better world because source 1 of the four would be there. Does Smith have anything to say about that? No; speaks to the politics that followed his time, democratic age. Now, social-democratic age. Group at large defined by the polity who become actors of the first three sources, but bad political economy at the fourth source. Smith didn't see it coming. Outside of Smith: when government creates a social security system, source 4 versus sources 1-3, contract between parent and child. Smith's taxonomy gives you a way of assessing the richness of human life but have to concede that world without social security or without rules against price gouging, while good at source 4, will have 1-3 problems. Not so clean. Social democratic age: certain take on the first three sources but not the only take. Take on capitalism is that its great on 4 but it degrades the human spirit. Have to concede, but loose, vague and indeterminate. Here is Smith, fountainhead of original liberalism, but wrote a whole book about why we have a natural impulse toward innate sympathy, just posited it as a natural impulse same as we feel hunger: posited that we have tendency to connect sentimentally. Didn't try to derive it; different from homo-economicus slander. Four sources can conflict.
|Justice. Par. on pp. 269-270, in Part VII, other moral systems. Off the track, book is so mysterious. Different notions of justice: one, the commutative justice. Only place in book where he uses the adjective "commutative." Abstaining from what is another's: person, property, promises, sometimes includes reputation. Distributive justice, which "consists in proper beneficence in the becoming use of what is our own." "Becoming" meaning comely, attractive, desirable. Defining in terms of ownership, what is our own. What do we consider to be our own? Our property, what you might give to the hungry. Other interpretation, because of "our", depends on polity. Footnote: Distributive justice of Aristotle consists in proper distribution of rewards from the public stock of a community. Aristotle is talking about community's own, Smith an individual's own. Social democrats today ultimately see the resources of a polity as owned collectively by "we," making rules through the democratic process delegating what you can do with that car, that house, that income, which ultimately is ours collectively but which we let you call your own. Social justice. Distinguish between distributive justice as Smith meant it and social justice by saying the former understands a libertarian or classical liberal configuration of ownership. Restrictions but it's not yours collectively to start. Libertarian distributive justice versus social justice. But others, like Sam Fleischacker, are making a social justice reading of Adam Smith. Does go beyond the Randian concept of the virtues of selfishness, suggesting you have an obligation to right a wrong when you see a person suffering to give them charity. Using the word "justice" about your state of affairs and mine but not using the authority of a larger concept of property. Not a redistribution, to use a term of modern thought. The word "redistribution" suggests there was an initial distribution; appropriate to say it's created, but what Smith is saying is that once it's created there is an aspect of what happens after the fact that is appropriate and some that is not. Distinction he draws, based on this ownership idea, is that commutative justice can be established by force and violators of it can be physically, coercively punished. Can hang a murderer. Distributive justice has no such claim. Has moral obligations, beneficence, generosity; you can frown on someone socially, but cannot take from him, can't violate the liberty principle, can't mess with his stuff. Smith doesn't bar the idea of a superior forcing giving to charity--brings it up, says it should be done with great caution, but doesn't say it can't be done. Interested in having a society that is basically egalitarian, can't force people to be beneficent. Forcing someone to be charitable doesn't make him charitable; in fact, induces resentment and does the opposite. Fellow feeling, range of stuff, everything from hate speech to racism to sexism to rudeness. Want to live in a world where they don't exist, but we live in a world where people have a natural impulse toward them, and can't make them illegal. Better ways to create better human beings. Legislating it could even upset those better ways. If government takes $5000 from me to give to charity, it could override my doing it myself plus also invaded my stuff and the moral message was lost because it wasn't an act of my own choice. Some argue that we should be proud to be taken from to give to charity.
|Another type of justice: esteem. All these together make up Plato's justice. Encompassing one, platonic, commutative, distributive, esteem justice; outside of this set, which Smith recognizes, is social justice, so 5 to keep track of. Justice and Beneficence, section setting out how justice can be forced, meaning if someone messes with your stuff you can punish them. Violators can be physically punished, even among equals. Neighbors can do this; self-defense is a just act. Pp. 78-91, becoming use of what is your own. Final two sentences: "Of all the duties of a law-giver, however, this, perhaps, is that which it requires the greatest delicacy and reserve to execute with propriety and judgment. To neglect it altogether exposes the commonwealth to many gross disorders and shocking enormities, and to push it too far is destructive of all liberty, security, and justice." Talking about coercive, redistributive justice. If it goes too far, it's hideous. What did he have in mind, tyranny? One-off paragraph. Remarkably parallel to Hayek in The Fatal Conceit on the micro-cosmos and macro-cosmos, and the natural impulse to take the connections in the family and extend them beyond the family to society at large. Quote, p. 18: "Part of our present difficulty is that we must constantly adjust our lives, our thoughts and our emotions, in order to live simultaneously within different kinds of orders according to different rules. If we were to apply the unmodified, uncurbed, rules of the micro-cosmos (i.e., of the small band or troop, or of, say, our families) to the macro-cosmos (our wider civilisation), as our instincts and sentimental yearnings often make us wish to do, we would destroy it. Yet if we were always to apply the rules of the extended order to our more intimate groupings, we would crush them. So we must learn to live in two sorts of world at once... [italics original]." Natural beneficence for the people close to us, and if we try to take that to the larger order we will destroy society. Kind of what Smith is saying there. Good fit, seeming hyperbole. Libertarian understanding of liberty. Justice and liberty two sides of the same coin, ownership versus abstaining from what is another's. No free-riding problems in Adam Smith; public goods discussed in WoN, maybe magistrate comes in there. Smith silent on whether they are violations or not. When it's the superior and the superior is forcing people, question of expediency and not count it as unjust just on the basis that it's someone's policy. There are paragraphs in the WoN where he accepts the legitimacy of government action beyond enforcement of contracts. Even in education, he was quite ambiguous about it. Night watchman. Chapters on taxation. Rich man and his carriage in WoN: luxury carriages, suggesting egalitarian strain, kind of progressive taxation, still might be taking same percentage. Left-readers of Smith.
|Anything else? Today hit on some of the stuff that is often neglected in people's reading and understanding. Idea of the partial spectator, when you are acting, what an impartial spectator would think of your actions and how that would affect you. Other times Smith means your conscience. Internal spectators or a God, or useful just to think of such a God. Plan for reading along on the Wednesday podcasts: four more, but might not get to Part VII, which was touched on here. Will read and discuss Parts I-VI.