Before 'The Wealth Of Nations,' Adam Smith Penned The Ultimate Guide To A Moral Life

Capitalism's Founding Father Believed That Money Can't Buy Happiness

When the name Adam Smith comes up, 99 percent of the time it's in reference to the Scottish philosopher's 1776 magnum opus An Inquiry Into The Nature And Causes Of The Wealth Of Nations, a manifesto on free-market capitalism and the division of labor.

Virtually every introductory economics class teaches the principles of The Wealth Of Nations, a text whose influence on Western culture and global economics is difficult to overestimate. But even those who are familiar with Smith's work may not know that the "invisible hand" followed a sweeping ethical treatise on human nature and the pursuit of happiness. The largely forgotten The Theory of Moral Sentiments, published in 1759, addresses the psychology of morality, and explores how man deals with conflicts between morality and self-interest.

Stanford economist Russ Roberts, for one, knew The Wealth of Nations inside and out, but Moral Sentiments sat on his shelf for nearly 30 years until he finally picked it up and gave it a read. Now, Roberts calls the book a "marvel" and a "road map to happiness, goodness, and self-knowledge" that completely changed his life.

"Even though he's the father of capitalism and wrote the most famous and maybe the best book ever on why some nations are rich and others are poor," Roberts, host of the popular podcast EconTalk, writes in his new book, How Adam Smith Can Change Your Life, "Adam Smith in The Theory of Moral Sentiments wrote as eloquently as anyone ever has on the futility of pursuing money with the hope of finding happiness."

At first glance, there may seem to be inconsistency between Smith's two works -- one which advocates economic self-interest, and the other which suggests empathy and altruism are as natural to us as eating and sleeping. But for Smith, these two points are not as discordant as they might seem. Smith suggests in The Theory of Moral Sentiments that both the individual and society benefit if we pursue our own interest through virtuous actions.

The Theory of Moral Sentiments, according to Roberts, is the greatest self-help book that almost no one has read -- and it makes you realize that not much about human nature has changed since the 18th century. "A wise-enough man can reach across more than two centuries, get your attention, and teach you a thing or two about yourself and what's important," writes Roberts.

Here are four essential pieces of wisdom from The Theory of Moral Sentiments to apply to your own pursuit of the good life.

We're all innately self-interested -- but we're also wired to care about others.

Smith stresses that empathy is one of the most fundamental human drives, and he states this from the very outset.

The first lines of the text read, "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."

Smith doesn't deny that we're all looking out for ourselves, and that we live in a world where individuals must compete for scarce resources. But he cares deeply about our ability to share the feelings of others, a defining human characteristic. We can actually be self-interested and altruistic at the same time. The virtue of benevolence, writes Smith, is "capable of counteracting" our strongest selfish impulses -- for instance, when given the choice between a small harm done to ourselves and a significant harm done to a number of other people, we will sacrifice our selfish interests and allow the harm to be done to ourselves.

We make this sacrifice because of an imaginary "impartial spectator," Smith writes, who we believe to judge the morality of our actions. The impartial spectator is a sort of moral yardstick against which we judge our own actions and the actions of others, which serves to remind us of how petty our concerns are when viewed through the lens of all humanity's needs. As a result, reflecting on the judgment of the impartial spectator teaches us both humility and generosity.

The desire to be loved is universal.

In The Theory of Moral Sentiments, the founding father of capitalism says that the pursuit of fame and fortune is not what will make us happy.

What we really want is to be loved, and to find a sense of purpose in what we do. We desire to be loved, respected and appreciated -- in fact, Smith goes so far as to say, "the chief part of human happiness arises from the consciousness of being loved."

But for Smith, it's not just about having a romantic partner. As Roberts explains, we're happy when our peers "love us for what we do and who we are."

"When we earn the admiration of others honestly by being respectable, honorable, blameless, generous, and kind, the end result is true happiness," Roberts writes.

There's another reason that money can't buy happiness. Smith believes that having too much stuff -- or as he puts it, "trinkets of frivolous utility" -- does not contribute to our happiness, and can instead act as a burden that weighs us down.

Don't waste your energy trying to change things you can't control.

Smith was deeply influenced by the ancient Greek and Roman philosophers, particularly the Stoics, who created a philosophy to help people find meaning and happiness in an inherently capricious and unpredictable world. The foundational concept of the stoic philosophy is reflected in the words of the famous Serenity Prayer: "God grant me the serenity to accept the things I cannot change; courage to change the things I can; and wisdom to know the difference."

Smith writes that happiness requires that we act to change that which is under our own control, and let go of that which we cannot control -- “never complain of that of which it is at all times in your power to rid yourself," he says.

Let go of attachments.

One of the main lessons of The Theory of Moral Sentiments is that in order to find happiness, we must let go of our expectations and our attachment to particular outcomes. It's an idea that's reflected in a number of religions and wisdom traditions, and is perhaps best known as one of the four noble truths ("attachment creates suffering") of Buddhism.

Attachment causes us to magnify our problems, and to make them seem worse by constantly comparing what we have to what we want. Smith urges us to let go of comparison and clinging in order to find peace of mind. He writes:

“The great source of both the misery and disorders of human life, seems to arise from over-rating the difference between one permanent situation and another. Avarice over-rates the difference between poverty and riches: ambition, that between a private and a public station: vain-glory, that between obscurity and extensive reputation. The person under the influence of any of those extravagant passions, is not only miserable in his actual situation, but is often disposed to disturb the peace of society, in order to arrive at that which he so foolishly admires. The slightest observation, however, might satisfy him, that, in all the ordinary situations of human life, a well-disposed mind may be equally calm, equally cheerful, and equally contented."

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