Adam Smith Was A Behavioral Economist And No Fan of Greed

Adam Smith hated greed. He'd likely be horrified to see how his name is now used. And any Smith fans who believe selfishness is a virtue distort what Smith called his best work.


Adam Smith was no fan of greed. And Smith fans who hold selfishness a virtue distort what he called his best work.

1. “Adam Smith was a behavioral economist,” says Richard Thaler (noted Misbehaving adder of empirical psychology to economics).

2. Smith got famous first for what we’d now call psychology. Edmund Burke called The Theory of Moral Sentiments “fittest to explain those natural movements of the mind... which every Science relating to our Nature” needed (commending Smith’s "illustrations from common Life").

3. Smith begins Sentiments by observing that “the virtuous” have no monopoly on sympathy—“the most hardened violator of... laws” has sympathies. Even the “greatest ruffian,” however selfish, “evidently [has] some principles in his nature which interest him in the fortunes of others, and render their happiness necessary.”

4. Sentiments "entranced a public caught up in the cult of sensibility and virtue" (virtue—>logical life skills).

5. Smith had a lifelong preoccupation with virtues and their connection with republicanism ( = rule for the “public good” ≠ sum of private interests).

6. Smith’s approved virtues required the rule of “prudence, of strict justice, and of proper benevolence.” Plus self-command of passions. (Note: self-command—>deeply adaptive in human evolution.)

7. Smith’s now more famous book, The Wealth of Nations (WoN, 1776), is a founding document of economics. But it is no “greed is good” free-market “Bible of Capitalism.” Consider a few “surprising” quotes:

8. Because businesses “have generally an interest to deceive and even oppress the public,” they often “conspire” accordingly.

9. Because of their “mean rapacity… merchants and manufacturers.. neither are nor ought to be the rulers of mankind.” Smith feared greed in unfettered markets.

10. "When... regulation… is in favor of the workmen, it is always just.”

11. “Every tax... is to the person who pays it a badge… of liberty. It denotes that he is subject to government." (Liberty requires government—>can’t be secured privately.)

12.  Smith’s “public good” republicanism is baked into America’s founding documents (e.g. Jefferson held to Smith’s Scottish Enlightenment sensibility).

13. The “Declaration’s” first listed justification for Independence is America’s need to enact “Laws… necessary for the public good.” The Constitution specifies government’s duty to “promote the general Welfare” (listed right after “provide for the common defense”).

14. Smith would likely be horrified by any republic ruled by rapacious free-market interests (today seemingly lacking the sympathies of Smith’s “greatest ruffians”).

15. Thaler says all economics was behavioural until the 1940s. After that all human behaviours were filtered, fitted, and squeezed into the formulation Economics = Optimization + Equilibrium.

16. But such cartoon selfish optimizing behaviours are neither “natural movements of the mind” nor evident in “common Life.” Economics must return to its behavioural roots.

(17. Smith got the “invisible hand’ from Shakespeare. Sentiments long outsold WoN.)

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Illustration by Julia Suits, The New Yorker Cartoonist & author of The Extraordinary Catalog of Peculiar Inventions.

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Photo: Luisa Conlon , Lacy Roberts and Hanna Miller / Global Oneness Project
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  • Before the hurricane season even started in 2020, Arthur and Bertha had already blown through, and Cristobal may be brewing right now.
  • Weather forecasters see signs of a rough season ahead, with just a couple of reasons why maybe not.
  • Where's an El Niño when you need one?

Welcome to Hurricane Season 2020. 2020, of course, scoffs at this calendric event much as it has everything else that's normal — meteorologists have already used up the year's A and B storm names before we even got here. And while early storms don't necessarily mean a bruising season ahead, forecasters expect an active season this year. Maybe storms will blow away the murder hornets and 13-year locusts we had planned.

NOAA expects a busy season

According to NOAA's Climate Prediction Center, an agency of the National Weather Service, there's a 60 percent chance that we're embarking upon a season with more storms than normal. There does, however, remain a 30 percent it'll be normal. Better than usual? Unlikely: Just a 10 percent chance.

Where a normal hurricane season has an average of 12 named storms, 6 of which become hurricanes and 3 of which are major hurricanes, the Climate Prediction Center reckons we're on track for 13 to 29 storms, 6 to 10 of which will become hurricanes, and 3 to 6 of these will be category 3, 4, or 5, packing winds of 111 mph or higher.

What has forecasters concerned are two factors in particular.

This year's El Niño ("Little Boy") looks to be more of a La Niña ("Little Girl"). The two conditions are part of what's called the El Niño-Southern Oscillation (ENSO) cycle, which describes temperature fluctuations between the ocean and atmosphere in the east-central Equatorial Pacific. With an El Niño, waters in the Pacific are unusually warm, whereas a La Niña means unusually cool waters. NOAA says that an El Niño can suppress hurricane formation in the Atlantic, and this year that mitigating effect is unlikely to be present.

Second, current conditions in the Atlantic and Caribbean suggest a fertile hurricane environment:

  • The ocean there is warmer than usual.
  • There's reduced vertical wind shear.
  • Atlantic tropical trade winds are weak.
  • There have been strong West African monsoons this year.

Here's NOAA's video laying out their forecast:

But wait.

ArsTechnica spoke to hurricane scientist Phil Klotzbach, who agrees generally with NOAA, saying, "All in all, signs are certainly pointing towards an active season." Still, he notes a couple of signals that contradict that worrying outlook.

First off, Klotzbach notes that the surest sign of a rough hurricane season is when its earliest storms form in the deep tropics south of 25°N and east of the Lesser Antilles. "When you get storm formations here prior to June 1, it's typically a harbinger of an extremely active season." Fortunately, this year's hurricanes Arthur and Bertha, as well as the maybe-imminent Cristobal, formed outside this region. So there's that.

Second, Klotzbach notes that the correlation between early storm activity and a season's number of storms and intensities, is actually slightly negative. So while statistical connections aren't strongly predictive, there's at least some reason to think these early storms may augur an easy season ahead.

Image source: NOAA

Batten down the hatches early

If 2020's taught us anything, it's how to juggle multiple crises at once, and layering an active hurricane season on top of SARS-CoV-2 — not to mention everything else — poses a special challenge. Warns Treasury Secretary Wilbur Ross, "As Americans focus their attention on a safe and healthy reopening of our country, it remains critically important that we also remember to make the necessary preparations for the upcoming hurricane season." If, as many medical experts expect, we're forced back into quarantine by additional coronavirus waves, the oceanic waves slamming against our shores will best be met by storm preparations put in place in a less last-minute fashion than usual.

Ross adds, "Just as in years past, NOAA experts will stay ahead of developing hurricanes and tropical storms and provide the forecasts and warnings we depend on to stay safe."

Let's hope this, at least, can be counted on in this crazy year.

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