Adam Smith, Greek Tragedy, and Public Policy
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In high school civics classes, Adam Smith is a cartoon character. Like Mr. Burns from The Simpsons, he is portrayed as selfish, cold, and calculating. The real-life Adam Smith could not have been more different. His entire system of thought is based on empathy and caring for other people.
Smith’s highest form of happiness is “to love and be lovely.” That means being capable of feeling and expressing love—not just romantic love, but love for family and friends. And “lovely” in the 18th century sense that Smith used it doesn’t mean pretty; it means being worthy of being loved. It means being thoughtful, kind, and trustworthy, and helping others when they need a hand.
Even Smith’s free-market views on trade rely on empathy. The alternative to trade is theft, which is a selfish act. Trading is inherently other-regarding. That other person has rights, and you respect those rights by exchanging instead of stealing—and you also respect their right to say no deal.
To trade successfully, but you have to see things from someone else’s point of view. What do they see as fair? What do they value? What would they like in return? How can I show this person that I am trustworthy, so we can trade again in the future?
The other-regarding aspects of Smith’s thought is far too little known. But where did Smith’s views on empathy come from in the first place? Over at Liberty Fund’s Adam Smith Works website, I explore a surprising answer: Greek tragedy.
Greek tragedies and other dramas come up throughout The Theory of Moral Sentiments, Lectures on Rhetoric and Belles Lettres, and Essays on Philosophical Subjects. If they are mostly absent from The Wealth of Nations, it is perhaps because that book is more about applied empathy than the thing itself.
Why were the Greek tragedies so important for Smith? One likely reason is their moral ambiguity, which requires empathy to navigate.
Hayek wrote that an economist who is only an economist is not a good economist. Disciplinary boundaries are arbitrary. It’s good to draw from diverse sources. If Adam Smith can do it, so can we today.
Read the whole thing here.