The Invisible Hand and Social Order
In this 300th year after the birth of Adam Smith, much of the focus has been on Smith’s economics, as recorded in The Wealth of Nations (1776). But Smith’s ethical thinking was no less profound. Indeed, it was The Theory of Moral Sentiments (1759) that made him famous.
Like The Wealth of Nations, The Theory of Moral Sentiments (TMS) was a complete break from the thinking of the time. Ethics had until then been widely assumed to be based on God’s will, or the clerics’ interpretation of it; or something that could be deduced through abstract reason; or even something that could be felt through some ‘moral sense’ like touch or vision. Smith, by contrast, argued that morality stemmed from our human nature as social beings, and our natural empathy for others.
This replaced speculative thinking by scientific method. Smith maintained that by observing ourselves and others, we could discern the principles of ethical behaviour. It was a matter of psychology: how we form judgements about ourselves and others, and the influence of customs, norms and culture upon those judgements.
This scientific approach was very much in line with the Scottish Enlightenment, which stemmed in part from the exchange of ideas between Scotland and England following the 1707 Act of Union, and sought to apply observation and scientific method to the study of humankind. Old hierarchies were breaking down, with industrialisation replacing Scotland’s old feudal lifestyles, and with religious pluralism, leading to a more active debate on morals and virtues. New thinkers, like Francis Hutcheson and David Hume, were role models for Smith’s intellectual radicalism.
TMS argues that morality is rooted deeply in human psychology, especially the empathy we have for our fellow humans. By nature we understand, and even share the feelings of others. We want others to like us, and we strive to act so that they do. Even if there is no one else around to see our actions, we are still impelled to act honestly, as if an ‘impartial spectator’ is judging us at all time, setting the standard by which we judge ourselves and others. Every choice we have to make helps us see that standard more clearly and act according to it more consistently. All of which leads us, as if drawn by an invisible hand, to create a harmonious social order.
TMS is primarily a descriptive account of human moral action. It examines how people actually make moral choices, and the pressures on them to do so. But it also provides a guide on how we can cultivate our morality, emphasising the importance of self-reflection and self-improvement.
It is no exaggeration to say that TMS laid the foundations for the subsequent development of psychology, sociology and economics, helping establish them as distinct subjects of scientific enquiry. His idea that self-interested actions—wanting to be liked by others, or exchanging things we value less for others’ things we value more—had a profound effect on the rise of liberal thought.
Smith’s approach is just as relevant today as it was in 1759. Through self-reflection, we can make better moral choices. By sharing the feelings of others, we can foster understanding between individuals and groups and create a more peaceful humanity. By understanding our shared interests we can live and work and collaborate together for the mutual benefit of us all, both in economics and in life in general.