Scottish philosopher Adam Smith is well-known and well-loved for founding the study of political economy with of his famous work, The Wealth of Nations. However, he had in fact authored another book before it that is foundational to that foundation. It’s called The Theory of Moral Sentiments, and I would argue that it’s currently a more important read– especially as the culture of developed countries slumps towards moral relativism. Blatant evidence of the divorce of economics from its moral moorings is found in “the Adam Smith problem,” which encapsulates how economists (and experts alike) find it hard to understand that the same individual who wrote about becoming a good person and the origins of morality in a community was also fervently curious about the nature and causes of the wealth of nations. For a man of his time, and a moral philosopher at that, the real question is how did he get so many things right about economics? The key is that he approached human behavior with an integral view of the human person. He understood the totality of visible and invisible incentives for our actions. In The Theory of Moral Sentiments, he writes in the second chapter:
Man naturally desires, not only to be loved, but to be lovely, or to be that thing which is the natural and proper object of love. He naturally dreads, not only to be hated, but to be hateful; or to be that thing which is the natural and proper object of hatred. He desires, not only praise, but praiseworthiness; or to be that thing which, though it should be praised by nobody, is, however, the natural and proper object of praise.
This is the crux of the intersection of economics and morality. Applied economics is a tool by which we achieve ends, and it is true that we do not necessarily need to judge those ends as worthy or unworthy of achievement when the models are used to determine whether they are achievable. From this it has been said that economics is an amoral science. Questions can clearly be formatted: Should Whole Foods make 300 more salads or 100 more cupcakes to increase profit? Should our family invest in real estate or bonds to save for our child’s college education? Should the federal government cut the income tax rate to raise revenue and increase growth?
But the interesting thing is that tool shapes not only outcomes but the craftsman himself.
With each fresh economic decision, we are also changed (the littlest bit) into someone either more lovely or more dreadful. The outcomes and outside standards of our life will determine whether we are praised, loved, and admired by our fellow man or not– but it is the inner, deep life and moment-to-moment orientation of our being that determines whether we are lovely to the core.
Thus, I would argue that economics is not merely amoral because the invisible moral reality underpinning our visible economic reality cannot be divorced from one another. The man who gives money at church is the same man who decides to pay private school tuition, is the same man who pays taxes and votes for officials. Later while describing vanity, Smith touches upon the problem that arises when they are. In contrast to doing things because they are inherently praiseworthy, oftentimes we act only for the praise and esteem of our fellow humans. The reality of “good choice” vs. “bad choice” are replaced with “makes-me-look-good choice” vs. “makes-me-look-bad choice.” Smith writes:
They look upon themselves, not in that light in which, they know, they ought to appear to their companions, but in that in which they believe their companions actually look upon them.
In the United States, this extensive phenomenon has been labeled with the highly technical term “keeping up with the Joneses” and can be observed in every neighborhood, office building, and church. If you ask around (college kids do that kind of thing) that kind of life seems to be unfulfilling and just plain boring after awhile.
The good news is that many people, from professors to Popes, are writing about this essential relationship between morality and economics again. In “Rethinking Morality,” Professor McRorie discusses a few key texts to highlight the strengthening link between morality and behavioral economics. EconTalk and Intelligence Squared (podcasts I just gleefully stumbled upon) wrestles with these topics in refreshingly open discourse. And of course, there seems to be no subject on which the light of St. Pope John Paul II the Great has not shone:
It is not wrong to want to live better; what is wrong is a style of life which is presumed to be better when it is directed towards “having” rather than “being”, and which wants to have more, not in order to be more but in order to spend life in enjoyment as an end in itself. It is therefore necessary to create life-styles in which the quest for truth, beauty, goodness and communion with others for the sake of common growth are the factors which determine consumer choices, savings and investments (Centesimus Annus).
Back to Adam Smith– a real trap of free market cultures seems to be the ability to look praiseworthy without becoming praiseworthy. And here’s the real rub: there will be choices that will not gain us love, praise, and admiration by our fellow human beings. In fact, truly praiseworthy choices may even earn us hatred, blame, and suffering.
We must choose them anyway.