Gone but not forgotten.

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Adam Smith and the Quackish Arts

Clive Crook is a Bloomberg View columnist and writes editorials on economics, finance and politics. He was chief Washington commentator for the Financial Times, a correspondent and editor for the Economist and a senior editor at the Atlantic. He previously served as an official in the British finance ministry and the Government Economic Service.
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I approached "How Adam Smith Can Change Your Life" -- a new book by Russ Roberts -- a little gloomily. It presents itself as an introduction to Adam Smith's lesser-known masterpiece, "The Theory of Moral Sentiments," in the guise of a self-help book for the morally perplexed. Oh dear. I didn’t like the sound of that.

The chapter headings offered a grim prospect. "How to Be Happy." "How to Be Loved." "How to Be Lovely." And that wasn't the worst. Jumping ahead  to skim the acknowledgements (as one does), I recoiled to learn that Roberts sees his title as a homage to Alain de Botton, author of "How Proust Can Change Your Life" -- a book about Proust for people who can't be bothered to read Proust, which Roberts calls "marvelous." I never finished it but I read enough. Leon Wieseltier speaks for all curmudgeons on this:  

De Botton is the celebrated author of a series of books that flatten great literature into self-help literature and philosophy into tasty little homilies for the haute bourgeoisie. He is what Oprah Winfrey would have been if she had read The World as Will and Representation

We must commend Wieseltier for not always trying to be lovely.

Yet despite these forebodings and provocations, I persisted. I know Roberts, a research fellow at Stanford's Hoover Institution, mainly as the host of a popular series of economics podcasts: They're really good, so I started reading. I have to say his book didn't just hold my interest, but quite won me over. I loved it.

Smith is misunderstood -- especially by his most devoted admirers. In "An Inquiry into the Nature and Causes of the Wealth of Nations" he offered a compelling, coherent account of market economics. The book, published in 1776, was amazingly ahead of its time, anticipating where modern capitalism might go before modern capitalism had even begun. Smith saw what specialization, the division of labor, and trade could achieve while the facts on the ground still provided only an inkling.

And he understood an astonishing and shatteringly important fact that still strikes many as paradoxical if not self-contradictory -- that the enlightened pursuit of self-interest inadvertently advances the collective good. This is still the key to understanding capitalism.

Unfortunately, the stupid caricature of this insight is, "Greed is good." Even avowed Smithians are capable of casting his ideas in this debased way. Smith didn't think that greed was good. That's obvious even in "Wealth of Nations," despite the preoccupation with profit and self-interest. But Smith's previous book on "moral sentiments" was explicitly concerned with the centrality of virtue, self-control and social cooperation. Hence the misconception, among people who've read neither book, that there are two Adam Smiths.

For me, the best thing about "How Adam Smith Can Change Your Life" is that Roberts explains how the two books fit together. His last chapter, though annoyingly entitled, "How to Live in the Modern World," puts it really well:

"The Theory of Moral Sentiments" is a book about our personal space -- how others view us and how we interact with them. It's not a book about strangers. It's a book about the people we see frequently, some every day, and how our interactions with those around us shape our inner life and behavior. In "The Wealth of Nations," Smith is writing about how we behave in a world of impersonal exchange, which is inevitable in a world of strangers.

In "The Fatal Conceit," as Roberts points out, Friedrich Hayek examined the disastrous consequences of confusing these two spheres -- that is, of trying to govern societies of strangers as though they were communities of kith and kin. Smith never addressed the issue: He didn't foresee communism. But Roberts says this:

Where I think Smith would agree with Hayek is in our desire to look up to, adore, and entrust our fate to powerful leaders… [They] are warning us about the danger inherent in that yearning for a politically powerful figure whom we can trust. That danger doesn't exist just with tyrants -- citizens in democracies have similar yearnings.

The larger part of the book is neither an essay on the coherence of Smith's encompassing worldview nor really, thank God, the self-help guide it pretends to be. It's just a wonderfully readable appreciation of Smith's ingenuity and, again, surprising modernity in asking what it is to be happy, to be virtuous, to be prudent, and to live a good life. "The Theory of Moral Sentiments" asks fascinating questions and has invariably interesting answers, and Roberts's book mainly just revels in the discussion. You can't fail to be entertained.

The prudent man, says Smith:

…neither endeavors to impose upon you by the cunning devices of an artful impostor, nor by the arrogant airs of an assuming pedant, nor by the confident assertions of a superficial and imprudent pretender. He is not ostentatious even of the abilities which he really possesses. His conversation is simple and modest, and he is averse to all the quackish arts by which other people so frequently thrust themselves into public notice and reputation.

Quackish arts. Little did he know. Speaking of which, you can follow Roberts on Twitter: @econtalker.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Clive Crook at ccrook5@bloomberg.net

To contact the editor on this story:
James Gibney at jgibney5@bloomberg.net