Adam Smith’s View of Man

March 6, 2011

Since I brought up Adam Smith’s famous line in my last post, “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest,” I feel obliged to add that it is my understanding, conveyed to me via Ronald Coase’s paper “Adam Smith’s View of Man,” that this line is commonly misunderstood.

Coase quotes Smith from the passage leading up to his famous line: “In civilized society [man] stands at all times in need of the co-operation and assistance of great multitudes, while his whole life is scarce sufficient to gain the friendship of a few persons.”

Benevolence and regard for others is a good thing, and it is something we should cultivate in ourselves. However, a modern economy is just too big and we just don’t have enough time to develop real, close relationships with everyone on whom we depend in order to survive. Smith, then, wasn’t defending a “greed is good” mentality or praising selfishness. He was saying, look, benevolence is great, but it requires a lot of time to set up and maintain. Where it’s feasible, we should go with benevolence; only a monster would think of self-interest when dealing with his family and friends. But when we start talking about interacting with thousands or millions of people, benevolence isn’t a feasible solution anymore.

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