What Adam Smith can tell us about Christmas?
This isn’t going to be a watery attempt to argue that because so many of us receive presents we don’t want at Christmas that this shows how difficult it is to second guess what will maximise the recipient’s utility; and if close friends and family can’t work out what we want how can we expect government to – hence government should cut spending and slash taxes and put cash into the hands of ‘hard working families’ / ‘wealth creators’ / ‘the squeezed middle’ (delete as your politics deem appropriate). If you want a more full exposition of this view (but no intellectually richer – I have read it) google Adam Smith & Christmas and go onto the article on the Adam Smith Institute.
Rather more sensibly, let us consider what the great man wrote which does have relevance to the coming festive season. A peeling open of the pages of his greatest work, the Theory of Moral Sentiments (“TMS”) gives us some clues. –Note, as we have commented before this was his first and his last book so can be considered to more fully capture his world view than the much misquoted ‘Wealth of Nations’.
There is a surprising clarity in what Smith wrote which chimes with what most of us understand is the ‘true’ message of the Christmas period – human warmth, compassion, affection and love. Consider this:
When the happiness or misery of others depends in any respect upon our conduct, we dare not, as self–love might suggest to us, prefer the interest of one to that of many. The man within immediately calls to us, that we value ourselves too much and other people too little, and that, by doing so, we render ourselves the proper object of the contempt and indignation of our brethren. (TMS, pt iii. Chp iii)
Or, very appositely as it suggests that a profligate consumer society is not such a new phenomena, this:
How many people ruin themselves by laying out money on trinkets of frivolous utility?. (TMS, pt iv chp i)
We know this assessment by Smith is right. We recognise the phrase “..trinkets of frivolous utility…” and yet it requires a muscular exercise of our will to power to swim against the flow at Christmas and abstain, in even the smallest of ways, from the great festival of conspicuous consumption. And the difficulty we feel at doing this goes to the heart of another myth (or lie) we are told about ourselves – that we are rational economic men and women. Free , able and willing to exercise our own judgement as to what is in our own best interests (maximises our utility to use dry economics-speak).
If we were these mythic living breathing rational computers what would be the point of the toy and gift advertisements which now bombard us?
I hope that any readers who have got this far (and indeed, those who haven’t) have a restful, healthy and peaceful Christmas and New Year.