Friday, June 14, 2024

Section

বাংলা
Dhaka Tribune

THE LAST WORD

Sympathy for the Adam

It would be great if everyone operated as we should, but we don’t

Update : 14 Jan 2024, 03:12 PM

Adam Smith is the prophet of individualism, or even selfishness, in economic design and structure. It would be far better if we were all to be cooperative, not competitive, if we did not think of our own interests first. If we could then build that better world where the interests of others -- those poorer and less advantaged than ourselves -- were at the forefront of our minds instead of us all doing whatever just suits us. I am even one of his disciples frothing with excitement at the imposition of capitalism and free markets upon all. 

Except Smith himself was a great deal more perceptive than that. His other book, Theory of Moral Sentiments, was in fact all about this. What he called sympathy and what we would, these days, call empathy. There's a particular passage about how we twist and turn our bodies as we watch the performer on the tightrope. A pretty good description of mirror neurons. We see someone with the hammer and missing the nail and suck our own thumbs in sympathy -- or empathy. 

The other book, Wealth of Nations, is really about how we deal with the fact that people aren't like that all the time in their economic interactions. Sure, we'd like everyone to be but they just aren't. So, what do we do about that? 

It's at this point that we've got to understand that economics is not a normative science, it's a positive one. That is, it's not trying to say what should be, nor how people should be. That's ethics, religion, possibly just good manners. Economics is trying to portray what is. This is how people react to this incentive, to these sorts of events. 

With Smith there are those two books, one dealing a great deal with the should, the other with how we deal with the fact that the should doesn't happen very often? 

And that's what all this capitalist and free market economics is about. All of us disciples are entirely willing to agree that the world would be a better place if humanity were different from what it is. But it isn't -- humans actually seem to work in this manner here. So, how do we channel those ethical and moral failures of humans to their best possible ends? 

For example, no one who has spent more than 10 minutes observing our fellow people will fail to note that greed exists. Perhaps it shouldn't, but it does. So, can we channel that? Those willing to take the risks of losing all to gain great wealth can do so. 

So, the best that can be done is to note how we behave and then try to organize matters so as to channel those moral and ethical failures, so as to produce a wider than purely personal benefit. Which is really what Wealth of Nations is about. Not that we shouldn't try to attempt to be better people -- that's the first book -- but how do we deal with the fact that people won't be better people? 

Thus economics is that positive, not normative, science. Describing what is, not what should be. So that we can manage -- or attempt to manage -- 8 billion people as we are, not as we should be. 

This also gives us a very useful and very short test. If an economic plan demands that we humans be different, then the plan isn't going to work. Therefore we can reject it. If someone claims, “but this will work if only people were more cooperative!” then it's not going to work and we can reject it. Only those plans which channel humanity rather than insist it change are in fact going to work.

 

Tim Worstall is a senior fellow at the Adam Smith Institute in London.

Top Brokers

About

Popular Links

x