Thursday, January 14, 2010

Atom Smith

I'm preparing to teach a new freshman seminar class in the fall on Markets and Morality. Part of the preparation involves reading great texts that I never got around to before. The current book on the desk is The Worldly Philosophers by Robert Heilbroner.

It shames me that in some 40 odd years as a reader and 25 years as a pretending or practicing economist, I never picked up this classic. It's especially mortifying given that the book has been recommended many times.

Heilbroner is a masterful writer and narrator. A modest testament to the dexterity and draw of his prose is that my reading of his book was delayed by several weeks after my 15-year-old son snatched it from atop the "to read" pile.

Anyway, I wanted to share Heilbroner's summary (p. 71) of Adam Smith's philosophy and theoretical contributions.
The complex irrational world is thus reduced to a kind of rational scheme where human particles are magnetized in a simple polarity toward profit and away from loss. The great system works, not because man directs it, but because self-interest and competition line up the filings in the proper way; the most that man can do is to help this natural social magnetism along, to remove whatever barriers stand before the free working-out of this social physics, and to cease his misguided efforts to escape from its thralldom.
What a fantastic metaphor.

It's going to be hard to think about much else for the rest of the day--which, come to think of it, should be the point of great writing.