all people are inherently selfish, out for themselves with no concern for anyone else. Smith merely pointed out that even if people operated totally out of selfishness, the economic system could still function efficiently for the good of all. “The idea was, if people want to make a lot of dough, the way to do it is by giving you what you want, and they don’t care about you per se. And that doesn’t logically imply that people don’t care about others; it just means that even if they didn’t, you could have an effective capitalist economy and produce what people most want,” Camerer said. “I think Adam Smith has been kind of misread. People say, ‘Gee, Adam Smith proved that people don’t care about each other.’ What he conjectured, and later was proved mathematically, was that even if people didn’t care about each other, markets could do a pretty good job of producing the right goods. But logically that doesn’t imply that people don’t care.”14 So human nature is not necessarily as adamantly self-serving as some people would like to believe. Some people are selfish, of course, but others are not.

In fact, in Smith’s treatise on moral sentiments, he identified sympathy as one of the most important of human feelings. And he described the conflict between the person’s “impartial spectator”—a sort of long-term planner or “conscience”—and the passions, including hunger, fear, anger, and other drives and emotions. The brain’s impartial spectator weighs the costs and consequences of actions, encouraging rational choices that should control the reactions of the passions. While economists have traditionally assumed that people make rational economic choices, Smith knew that in real life the passions often prevailed. “Smith recognized … that the impartial spectator could be led astray or rendered impotent by sufficiently intense passions,” Camerer and two colleagues wrote in a 2005 paper.15

Nevertheless, the notion of self-interest and utility was dramatized by Smith in such a way that it formed a central core of subsequent economic philosophy. And not only economics was shaped by Smith’s ideas. His books also contributed in a significant way to the birth of modern biology.



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