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How Adam Smith Can Change Your Life
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How Adam Smith Can Change Your Life

An Unexpected Guide to Human Nature and Happiness

Russ Roberts
Portfolio UK, 2015
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7

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The Wealth of Nations, published in 1776, became the literary foundation of economics. The author of this influential book, Scottish moral philosopher Adam Smith, wrote a lesser-known work in 1759. The Theory of Moral Sentiments is about how we judge the character and conduct of others and of ourselves. It’s about living a good life and about the danger of confusing happiness with wealth. Economist Russ Roberts explains Smith’s belief that people have an individual, imaginary “impartial spectator” who accurately gauges the morality of their behavior and reminds them to be humble, because they “are little and the world is great.” He explains Smith’s contention that people need virtue to satisfy their natural desire to be admired and to deserve admiration. He discusses Smith’s view of virtue and its three components: “prudence, justice and beneficence.” Roberts finds it ironic that Smith – a dominant figure in the history of capitalism – so ardently supports the idea that money cannot buy happiness. The juxtaposition of Smith’s densely written passages and Roberts’s glib analysis can make for rocky and uneven reading. Yet getAbstract recommends the rewards available to the patient reader, who will learn that Smith’s 18th-century insights into human nature offer ample modern applications.

Summary

Money and Happiness

The Wealth of Nations, published in 1776, “gave birth to the field of economics” and made its author, Adam Smith, “the father of capitalism.” Economics encompasses far more than just mathematics; in fact, reducing it to just numbers limits the insights it offers. Think of economics as the study of choices, of “being aware of how choosing one road means not taking another.”

In his less-famous first book, The Theory of Moral Sentiments, instead of the machinations of markets, Smith explores the fundamental question of how to live a good life. In this 1759 book, the Scottish moral philosopher explores the sources of morality in a selfish world.

He writes with great insight and in an easy, accessible voice “on the futility of pursuing money with the hope of happiness.” Smith produced The Theory of Moral Sentiments in “intellectual competition” with other authors of his time, including Bernard Mandeville and Francis Hutcheson, who had competing ideas about human nature. Smith’s contemporaries also included his close friend, the philosopher David Hume, as well as Voltaire, “who ushered us into the age of reason.”

About the Author

Russ Roberts is the John and Jean De Nault Research Fellow at Stanford University’s Hoover Institution. He also wrote The Price of Everything: A Parable of Possibility and Prosperity. He hosts the weekly podcast EconTalk.

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