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Wednesday, March 4, 2015

Adam Smith: Zen Master

East and West converge on the "power of now"

According to Eckhart Tolle, the popular author of spiritual books including The Power of Now, happiness is only possible in the present, the now. Past and future are beyond reach, and so “the present moment is all you ever have.” He writes:

Nothing ever happened in the past; it happened in the Now. Nothing will ever happen in the future; it will happen in the Now.

His message isn’t that we should forget the past or abandon planning for the future. Rather, he’s expressing a psychological attitude consistent with many spiritual and religious traditions, Eastern and Western.

Economists, Ludwig von Mises and Adam Smith among them, have written in similar terms about the meaning and significance of the Now.

The praxeological Now

It’s true that Mises’s focus on the Now isn’t to explain how to achieve happiness. In fact, in the tradition of Carl Menger that Mises helped to develop, one of the requirements for human action is that we feel uneasy about our current situation, and uneasiness isn’t consistent with most concepts of happiness. But the relevant point for Mises is that human action only takes place in the present. Specifically, “from the praxeological aspect [that is, the aspect relevant to economics] there is between the past and the future a real extended present. Action is as such in the real present because it utilizes the instant and thus embodies its reality,” he writes.

And he doesn’t quite say, with Tolle, that it’s only in the present that we can tap into reality. But he does say that the only time available to us in which to act — to apply the knowledge gained from the past to change the future in accordance with our expectations — is the “real extended present.” The Now exists between memory and expectation.

Smith also wrote about the power of Now, and in much the same spirit as Tolle.

A Smithian perspective

Smith’s Wealth of Nations, published in 1776, is considered the first extended and systematic treatment of economics. Its lessons are still relevant, and I highly recommend it to anyone who seriously wants to learn about economic theory and economic history. But it’s not my favorite work by Smith.

My favorite, because of its subject matter and especially its beautiful writing, is Smith’s Theory of Moral Sentiments, published in 1759. I won’t attempt to summarize it except to say that it concerns the nature and origins of sentiments, such as sympathy, and the role they play in our social relations, similar to what today would fall under the heading of “cultural economics.”

The very first chapter, “On Sympathy,” begins:

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. Of this kind is pity or compassion, the emotion which we feel for the misery of others, when we either see it, or are made to conceive it in a very lively manner.

If you only know Smith from The Wealth of Nations, with its important lesson that “it is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest,” it may surprise you to see this opening observation on compassion. Personally, I was surprised by the level of psychological analysis contained in The Theory of Moral Sentiments, especially the insights into human happiness and unhappiness:

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.

So avarice and misplaced pride and ambition are the sources of misery to anyone, regardless of status or station. And the social distinctions we make between people in different professions aren’t due to differences in nature, a point Smith makes in a famous passage in The Wealth of Nations:

The difference between the most dissimilar characters, between a philosopher and a common street porter, for example, seems to arise not so much from nature as from habit, custom, and education. When they came into the world, and for the first six or eight years of their existence, they were, perhaps, very much alike, and neither their parents nor playfellows could perceive any remarkable difference.

This passage reflects Smith’s characteristically liberal (in the original, classical sense of the word) belief that all persons are created equal. And that, in turn, leads me to this wonderful passage in The Theory of Moral Sentiments:

What the favourite of the king of Epirus said to his master, may be applied to men in all the ordinary situations of human life. When the King had recounted to him, in their proper order, all the conquests which he proposed to make, and had come to the last of them; And what does your Majesty propose to do then? said the Favourite. — I propose then, said the King, to enjoy myself with my friends, and endeavour to be good company over a bottle. — And what hinders your Majesty from doing so now? replied the Favourite.

How wise! Smith goes on to explain,

In the most glittering and exalted situation that our idle fancy can hold out to us, the pleasures from which we propose to derive our real happiness, are almost always the same with those which, in our actual, though humble station, we have at all times at hand, and in our power.

This isn’t merely about stopping to smell the roses. Smith is saying that it’s always in our power to be happy, whoever and wherever and whenever we are. Happiness is and can only be here and now, and never “just around the corner.” In this sense, the relentless pursuit of happiness is the very source of our misery.

The inscription upon the tomb-stone of the man who had endeavoured to mend a tolerable constitution by taking physic; “I was well, I wished to be better; here I am”; may generally be applied with great justness to the distress of disappointed avarice and ambition.

Tolle couldn’t have expressed it better.

You can find a Portuguese version of this article here

  • Sanford Ikeda is a Professor and the Coordinator of the Economics Program at Purchase College of the State University of New York and a Visiting Scholar and Research Associate at New York University. He is a member of the FEE Faculty Network.