How Adam Smith Can Change Your Life

How Adam Smith Can Change Your Life: An Unexpected Guide to Human Nature and Happiness by Russ Roberts, Portfolio, 272 pages, $27.95, Hardcover, October 2014, ISBN 9781591846840

Many of my favorite books are about other books, whether it’s books on book collecting by Nicholas Basbanes and Milwaukee bookseller (and founder of the bookshop our company was born in) Harry W. Schwartz, Boswell's Presumptuous Task on the writing of The Life of Samuel Johnson by Adam Sisman, The Man Who Made Lists about the creation of Roget’s Thesaurus by Joshua Kendall, or The Buried Book about the loss and recovery of The Epic of Gilgamesh by David Damrosch.

So, I was thrilled to come across Russ Roberts’ new book, How Adam Smith Can Change Your Life, about The Theory of Moral Sentiments. The latter is a book that I have been coming across in other books more and more in the past few years, especially in books on behavioral economics. It is also Adam Smith’s first book, predating An Inquiry into the Nature and Cause of the Wealth of Nations by almost twenty years. In a way, it is “The First Book” of economics, the Gilgamesh of the field. And like that epic poem, it seems that The Theory of Moral Sentiments is now being rediscovered at the perfect moment.

Roberts himself admits that, though he’s always owned a copy, it wasn’t until a friend suggested he interview him about the book for his weekly podcast that he excavated The Theory of Moral Sentiments from his own shelf and dove in. And there, he found the opening lines:

How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it.

This is a common theme in modern, behavioral economics, most often made to counter the prevailing wisdom of the “rational actor” theory that an individual will always make the choice most beneficial to their own interest—an underpinning of the argument for unfettered markets. But we do derive something more than the happiness and affection of others by doing so. We also gain self-respect. As Adam Smith so poetically put it:

Man naturally desires, not only to be loved, but to be lovely.

If you’re having a difficult time making sense of that at first glance, don’t worry. Theory of Moral Sentiments is a “roadmap,” as Roberts describes it, “that takes a lot of difficult twists and turns” and “occasionally doubles back on itself” because it was an 18th century academic treatise designed as an argument with contemporaries that are no longer relevant or remembered. Roberts streamlines its arguments for us, putting it in an order we can easily digest and make sense of. He uses it to teach you how: not just to know yourself, but to be happy; not just to be happy, but to not fool yourself; not just not to fool yourself, but to be loved; not just to be loved, but to be lovely; not just to be lovely, but to be good; not just to be good, but to make the world a better place; and finally how to use all these lessons to live in the modern world—because while the technology in our pockets may be a smart phone instead of a pocket watch, our basic human motivations have not changed much in the last 250 years.

He dedicates neat, concise chapters to each of the topics above. And he does it all while quoting Smith extensively and then translating his sentiments for the modern reader. But there’s a seeming contradiction about Smith that Roberts posits in the introduction:

Adam Smith wrote as eloquently as anyone ever has on the futility of pursuing money with the hope of finding happiness. How do you reconcile that with the fact that no one did more that Adam Smith to make capitalism and self-interest respectable?

Roberts returns to answer that question at the end of the book, telling us that in Moral Sentiments, Smith is dealing with concerns of a daily life in which we interact with others personally, while Wealth of Nations details the economic life we all engage in with people at a(n increasing) distance. It’s as neat a summation as the book itself is of Smith’s arguments.

I can only hope that such neatness helps rescue The Theory of Moral Sentiments from the dustbin of history so it can be taught alongside The Wealth of Nations and give students a more nuanced and multi-faceted view of a life well-lived.