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Part I- A Bit of History

On 28 May 2014 I posted a Blog: Imaging a Better World: Moving forward with the real Adam Smith where I noted the following, amongst others:

‘There is no doubt that today capitalism is under fire. It is besieged and under attack. To my mind this is the best time to revisit Adam Smith and to try to see if we can locate the true and real Smith. As what has been mainly known about Adam Smith and ascribed to him, are far from the truth. The right-wingers and the market-fundamentalists for too long have abused Smith in order to promote their obnoxious agenda and to legitimise exploitation of people and resources for the benefit of the 1%.

‘In the interest of accountability to truth and to Smith himself, this must be challenged and attempts must be made to discover the real Adam Smith and his true values.’

Then, I noted that:

‘We should recall the wisdom of Adam Smith, “father of modern economics”, who was a great moral philosopher first and foremost. In 1759, sixteen years before his famous Wealth of Nations, he published The Theory of Moral Sentiments, which explored the self-interested nature of man and his ability nevertheless to make moral decisions based on factors other than selfishness. In The Wealth of Nations, Smith laid the early groundwork for economic analysis, but he embedded it in a broader discussion of social justice and the role of government. Today we mainly know only of his analogy of the ‘invisible hand’ and refer to him as defending free markets; whilst ignoring his insight that the pursuit of wealth should not take precedence over social and moral obligations.

‘We are taught that the free market as a ‘way of life’ appealed to Adam Smith but not that he thought the morality of the market could not be a substitute for the morality for society at large. He neither envisioned nor prescribed a capitalist society, but rather a ‘capitalist economy within society, a society held together by communities of non-capitalist and non-market morality’. As it has been noted, morality for Smith included neighbourly love, an obligation to practice justice, a norm of financial support for the government ‘in proportion to [one’s] revenue’, and a tendency in human nature to derive pleasure from the good fortune and happiness of other people.

‘In his "Theory of Moral Sentiments" he observed that "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."

Part II- Adam Smith and the Pursuit of Happiness

(N.B. In the spring of 2008, Michael Busch, a senior economics major at the University of Northern Iowa, wrote a fascinating article on Adam Smith and Happiness at the University’s business and economic journal, Major Themes in Economics.

I take my hat off to him. It is an excellent article, very informative, clear and easy-to-read. I am thus, very happy to share it with you.)

Adam Smith and Consumerism’s Role in Happiness: Modern Society Re-examined 

ABSTRACT

‘In modern America, consumerism has encouraged people to seek happiness through constant expansion of their material standard of living. Consumerism has led to a growth of status consumption and want-creation, both of which increase consumption without contributing to happiness. Adam Smith observed that lasting happiness is found in tranquillity as opposed to consumption. In their quest for more consumption, people have forgotten about the three virtues Smith observed that best provide for a tranquil lifestyle and overall social well-being: justice, beneficence and prudence. Applying the virtues to modern society may decrease overall consumption but will lead to a more satisfied life.’

Continue reading:

http://business.uni.edu/economics/Themes/Busch.pdf

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