How Adam Smith Can Change Your Life – Russ Roberts

How Adam Smith Can Change Your Life – Russ Roberts
While you might assume Smith’s most revealing explanation of how the world works is in The Wealth of Nations, it’s actually in his philosophy book, The Theory of Moral Sentiments. Russ Roberts helps break down Moral Sentiments by explaining how individual choices can lead to important social outcomes.

Most of you probably skimmed The Wealth of Nations in high school and immediately think “invisible hand” or “capitalism.” This book teaches a different side of economics: why money isn’t the only thing that matters in life and society. Economics teaches us that making a choice means giving up something, and since life is all about choices, we must get the most out of it by choosing wisely. In making those choices, Smith invites an Impartial Spectator (IS) – a metaphorical figure who constantly judges us against our morals, and we must develop the IS to continue living a better life. It is true that most people are fundamentally self-interested, but this is not the same as selfish. Each moral decision we make can greatly affect society as a whole.

There is no best way to make the world a better place – the difference you will make depends a great deal on your skills, passions and opportunities. However, we often fail to live up to the ideals we champion and the principles we claim to embrace. This cognitive dissonance, a direct result of ignoring our IS, proves we are humans prone to self-deception. Because examining our failures can be painful, we avoid situations in which we confront our shortcomings.

Noticing the flaws in others to spur self-improvement is a survival instinct. Instead of criticizing, we should look to improve upon the flaws we see in others, as they are often the same ones you would find in a mirror.

We ignore our IS daily. We say things not only to convince others, but to also convince ourselves. We fool ourselves into thinking that we’re acting with high morals when we’re not. We do what’s best for ourselves while convincing ourselves that our motivation is for someone else.

We approve or disapprove of other people’s behavior depending on whether their reactions match ours. I want you to like my friends and dislike my enemies.  But I can live with the fact that you don’t like my friends as much as I do.  I care more, says Smith, that you dislike my enemies.

Being good at our work helps others and makes the world a better place. Smith’s vision of what sustains civilization is the stream of approval and disapproval we provide when we respond to the conduct of those around us. That stream creates feedback loops to encourage good behavior and discourage bad. Society has a strong pull, so we should all try to live a high moral lifestyle.