US Congress Minority Leader Nancy Pelosi at a conference at the Brookings Institution lectured her audience of policy wonks. She chided slavish followers of Adam Smith’s Wealth of Nations(1776) who had never bothered to read his other book The Theory of Moral Sentiments (1759) which covers the rest of his description of human behavior: our altruistic impulses to help each other and our communities. Hillary Clinton and Elizabeth Warren take note!
How did Adam Smith’s earlier book get deep-sixed while his focus on competitive human behavior in markets became capitalism’s gospel of individual profit-maximizing? Clearly Smith’sWealth of Nations appealed to the animal spirits and ego needs of budding businesses, early swashbuckling stock markets, traders and merchant venturers exploring new lands for resources. Smith’s iconic image of an “invisible hand” convinced these early capitalists that their self-interest and gains also benefited society. Politicians and newspapers fell under this powerful imagery, since it seemed consistent with the scientific discoveries of Isaac Newton and his clockwork universe. Capital accumulation and great wealth became the sign of moral virtue as Max Weber wrote in The Protestant Ethic and the Spirit of Capitalism (1930). Francis Bacon, Newton and other scientists laid the groundwork for the triumph of Rene Descartes’ individualism and instrumental rationality. Materialism, reductionism and technological determinism won the day, as I explored inThe Politics of the Solar Age (1981, 1988).