Adam Smith: A Game of I and I

Adam Smith (1723-1790) evokes two visions. The first is his magnum opus The Wealth of Nations that laid the foundation of economics. It came out in 1776, the same year the US freed itself from British colonisation. The second image is the “invisible hand” and “self-interested behaviour”. These two created such confusion that the 19th century satirist Thomas Carlyle christened economics as the “dismal science”. Before The Wealth of Nations, Smith wrote another great book that went unnoticed in economics: The Theory of Moral Sentiments. It was first published in 1759 and revised before Smith died in 1790. Here, Smith teaches us not as a political economist, but as a moral philosopher on how to be loved and how to feel lovely.
Let's play a game called “I and I”. All day today and all day tomorrow, on a piece of paper, you write down everything you do. You look through your own eyes at others and through the eyes of others at yourself. You write a dual diary. As the “First I”, you go through life writing the diary like almost everybody else. You see the world through your own eyes. You also write side notes. As the “Second I”, you observe yourself through the eyes of others. Russ Roberts re-interprets this Second I as the “impartial spectator” (the moral sentiment). As individuals, we seldom see through the Second I or we don't know it exists. It's when we look at ourselves through the eyes of others, we can properly assess ourselves and find meaning on how to, as Roberts says, “love life and feel lovely about life.”
When we are genuinely loved, respected and appreciated, we feel lovely. Smith, however, was aware that many of us don't observe the Second I. Thus we fail to separate true praise from flattery. Remember Hans Anderson's Emperor? The person who was obsessed with fine clothes? He was so obsessed that the tailors wove him a cloth so fine that it was invisible. Only the true eye can see through it, they said. All the subjects of the Emperor praised his new clothes. There was one boy in the crowd who had true eyes. That boy was the Second I. Alas! The Emperor didn't know the Second I existed. The inevitable happened.
What else can this Second I teach us? Let's consider gadgets. Your current phone is probably enough for all the tasks you need to do. It's also in good working condition. The phone company comes up with an improvement. The RAM is better. There's more storage. The processor is the latest state of the art over other competitors. The design beats anything you ever saw. In 1759, Adam Smith asked the same question our Second I would ask us in 2015. Do we really 'need' that extra bit? The stress is on 'need'. Of course our wants are unlimited as economics teaches us from day one. The First I tells us: of course we want the whole universe in our pocket. The Second I asks us: do we really 'need' that extra bit? Isn't demand a function of our 'need' and not something else? This is Smith's misunderstood “invisible hand” that made self interest appear as selfishness without the Second I.
Play the game of I and I the way Adam Smith did in The Theory of Moral Sentiments in 1759 and in 1790. When you do something you shouldn't have, you'll know. You'll try not to repeat the mistake next time. When you do something in the eyes of others that make them happy, you'll also feel happy. If you see yourself through the First and the Second I at the same time, self-interest will make you appreciate life. You will probably be loved by others for what you are and also for what you're not. You'll probably feel lovely too to yourself.

Source: How Adam Smith Can Change Your Life: An Unexpected Guide to Human Nature and Happiness. By Russ Roberts. Penguin October 2014.

Asrar Chowdhury teaches economic theory and game theory in the classroom. Outside he listens to music and BBC Radio; follows Test Cricket; and plays the flute.
He can be reached at: [email protected]