Bookshelf

How Adam Smith Can Change Your Life

Takeaways from reading How Adam Smith Can Change Your Life.

This book takes the ideas and insights from Adam Smith’s “The Theory of Moral Sentiments” and makes them more accessible to the modern reader.

  1. How to know yourself
  2. How to be happy
  3. How to not fool yourself
  4. How to be loved

How to know yourself

Smith believed humans are naturally self-interested. But if we’re self-interested, then why do we complete acts of kindness and benevolence? Some might argue that we do these things because we are inherently kind and compassionate. Smith, however, says that the charitable actions we do for others are done in order to satisfy what we imagine is the standard that would be set by an “impartial spectator. “

This impartial spectator is a figure we imagine whom we converse with in some virtual sense. An impartial, objective figure who sees the morality of our actions clearly. It is this figure we answer to when we consider what is moral or right.

This impartial spectator sounds a lot like our conscience. But Smith’s contribution is to provide an unusual source for that conscience. Smith doesn’t invoke our values or our religion or any principles that might inform our conscience to produce feelings of guilt or shame at our misbehavior. Instead, Smith is saying that we imagine being judged not by God, and not by our principles, but by a fellow human being who is looking over our shoulder.

For Smith, the impartial spectator speaks to us in the voice of humility, which reminds us that we are small and the world is great. The impartial spectator is the voice inside our heads that reminds us that if we harm others in order to benefit ourselves, we will be disliked and resented.

If you’re alone with no chance of being caught doing a crime, YOU are still always watching. And as you contemplate committing the act, you imaginee how an outside would view it - you imagine the impartial spectator watching your actions.

How to be happy

“Man naturally desires, not only to be loved, but to be lovely.” - Adam Smith

Smith argues that we don’t just want to be loved by others, we want to be worthy of being loved.

When we earn the admiration of others honestly by being responsible, honorable, blameless and kind, the end result for us is true happiness.

When the jury of our peers love us for what we do and who we are, we’re happy. You might rebel against Smith’s formulation and argue it’s unhealthy to be motivated by external approval. But Smith isn’t arguing that our goal in life is to impress people around us so that we can be happy. That’s the wrong way to be loved. For Smith, being loved is a natural end result of being lovely.

Loveliness is an end in and of itself. You want to be a good husband because that’s the right thing to do. You don’t keep score in marriage. In marriage, you get pleasure from helping your spouse simply because that’s the kind of partner you want to be—a lovely one.

Smith’s ideal is achieved when your inner self mirrors your outer self. We often fall short of the ideal. Long before Bernie Madeoff’s Ponzi scheme was discovered, he likely didn’t sleep well at night. Why? Because Madeoff’s disconnect between his reputation and reality. Smith would say that Madeoff was a less happy man before he went to prison, not because he was afraid of being caught, but because in his own eyes he was already caught; he was a failure, and he knew it when no one else did.

A modern way to capture what Smith is talking about: we want to be authentic. If we get praise that we don’t deserve, Smith says, it should bother us. Knowing that praise is undeserved makes it impossible to enjoy. Why? It’s as if someone else is being complicated instead of you. And, undeserved praise is a reprimand—a reminder of what you could be.

“It is only the weakest and most superficial of mankind who can be much delighted with that praise which they themselves know to be altogether unmerited.”

To be loved without being lovely is a temptation for the weak. Smith encourages us to strive for harmony between our inner self and our outer self.

People around us want to be loved, just as we want to be loved. Sometimes they fool us into thinking we’re something we’re not, either through strategic flattery or or just through an honest mistake.Yet the biggest challenge we face isn’t detecting false praise from others —it’s detecting false praise from ourselves. We want so badly to be lovely that we’ll fool ourselves into thinking we are.

How to not fool yourself

We often fail to live up to the ideals we champion and the principles we claim to embrace. How does Smith reconcile these failings, large and small, with our desire to be lovely?

One explanation for selfishness—or worse, cruelty—is that some people don’t imagine an impartial spectator and have no interest in being lovely. This is a tempting way to view other people—people who don’t act the way we think they should are immoral or evil.

But Adam Smith had a different idea of why we fail to live up to the standards an impartial spectator might set or the people around us might set. Smith believed we are prone to self-deception. Our desire to be lovely can be so strong that we fool ourselves into thinking we are lovely when we’re not.

How to be loved

Smith says we naturally desire not only to be loved but also to be lovely. How does he reconcile this claim with what seems to be what we really desire—fame and fortune? Aren’t those the two urges that drive us?

Smith uses the word loved to encompass not just romantic love. When he says we want to be loved, he means paid attention to, liked, respected, honored. We want to matter. We want people to notice us. Smith notes that the world pays attention to the rich and famous people, and because of us, we wish we were rich and famous.

Instead of pursuing wealth or fame, Smith believed the path to contentment was to pursue wisdom and goodness. We are loved by others when we are wise and virtuous.

Seek wisdom and virtue. Behave as if an impartial spectator is watching you. Use the idea of an impartial spectator to step outside yourself and see yourself a others see you. Use that vision to know yourself. Avoid the temptations of money and fame, as they won’t satisfy you.

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