Adam Smith Links

1. Brad DeLong takes down Chris Bertram of Crooked Timber on the microfoundations of economics. Bertram writes:

"I ordered a copy of Tomasello’s Why We Cooperate in which he argues, on the basis of detailed empirical work with young children and other primates, that humans are hard-wired with certain pro-social dispositions to inform, help, share etc and to engage in norm-guided behaviour of various kinds.... [T]hat work in empirical psychology and evolutionary anthropolgy (and related fields) doesn’t – quelle surprise! – support anything like the Hobbesian picture of human nature that lurks in at the foundations of microeconomics"

DeLong responds:

"Adam Smith does not say: "the propensity to steal, pillage, rape, burn, and kill..." He says: "the propensity to truck, barter, and exchange one thing for another... to make a fair and deliberate exchange..."

The foundation of microeconomics is not the Hobbesian "this is good for me" but rather the Smithian "this trade is good for us," and on the uses and abuses of markets built on top of the "this trade is good for us" principle.

If microeconomics's foundations were as Bertram claims, Smith would not write:

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...

but would instead write:

Be wary of the butcher, and only enter his shope armed and with loyal and armed attendants at his back. For from his regard for his own self interest you cannot expect your dinner but rather that he will slaughter you and sell you to somebody else as long pig... "

Misunderstanding Keynes might still be OK... he's only been around for what, 75 years? And he ain't as broadly popular as Smith. We've had Smith for 234 years now! You'd think mutually beneficial exchange would be pretty broadly understood...

2. Tyler Cowen shares a very interesting book about Adam Smith's life. A great deal of effort seems to be put into covering Smith's various acquaintances - Hume, Quesnay, etc. Another eminent thinker Smith had considerable contact with was Benjamin Franklin. This is most likely covered in the book too - as I understand it, Franklin was quite important for shaping Smith's thinking on the British colonial system - I mention it because the relationship just came up in the Dorfman history that I'm working through at a glacial pace.

UPDATE: And one more I forgot. Jonathan Catalan shares this post from Bruce Caldwell, eminent historian of economic thought, on the need to bring the history of economic thought back into university education - where he specifically highlights Adam Smith. The post also emphasizes the importance of interdisciplinary dialogue - a point I strongly concur with.

UPDATE 2: A response is up on Crooked Timber. I didn't read it in detail, but I tenuously agree with what I skimmed. It's getting into the area of "selfish vs. self-interested" that is similar to the "rational vs. irrational vs. 'rationally irrational'" debates. I would criticize the initial Crooked Timber post for being too vague with its "Hobbesian" shorthand. When someone uses the term "Hobbesian" I take it to mean the "bellum omnium contra omnes" that people associate with him (Xenophon gets into these sorts of broad-stroke understandings of Hobbes in the comment section). That's clearly not what Smithian self-interest is, which is the sort of self-interest that we model. Crooked Timber is now getting into territory that is so vague and non-descript that it's hard to talk about. Self-interested, to me, does not mean anti-social or "selfish" (in the sense of greedy) - it just means seeking out the good for yourself. There's no assumption of anti-social tendancies that characterize a war of all against all. There's no sense of conflict to speak of in Smithian self-interest, nor is there in microeconomic modeling. So I still stand with DeLong, I can see why Crooked Timber might think he was unfairly critiqued, but I would just respond to that by saying he should have been more specific in the first place.