Adam Smith, Happiness and Commercial Life

Smith continues to be an inspiration for economists who work in the history of ideas.  A conference this week end, however, seeks to reclaim Smith's insights for political and social theorist.  Columbia University's Seminar in Political and Social Thought is sponsoring "Reclaiming Adam Smith" with papers by Emma Rothschild, Sam Fleischaker and others.  Papers can be downloaded only by members.  Gavin Kennedy at ASLL has promised various reports!  At APSA, Dennis Rasmussen has a paper on how and whether the Smithian impulse to "better our condition" really makes us better off.  In Rasmussen's view, Smith's argument was that though we rail against commercial society for making us continually toil, we fail to see how the desire to better our condition -- though never entirely fulfilled -- leads us to lives of relative security, liberty, and even happiness.

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[Adam Smith's Ghost]

This reminded me of an important article on the issue of envy and relative happiness that appeared in the Independent Review last winter, "Who Says Money Can't Buy Happiness?" by Dwight R. Lee (http://www.independent.org/pdf/tir/tir_10_3_05_lee.pdf). Here's an excerpt:

Economists have discovered, or so they think, that money doesn’t buy happiness. This idea, however, is hardly a new discovery, even for economists. Adam Smith discussed people’s limited ability to achieve happiness by acquiring
material wealth in his 1759 book The Theory of Moral Sentiments. The real discovery by some economists and other social scientists in recent years is that the money-doesn’t-buy-happiness claim can be used to justify higher taxes and more government spending.Although most people have long expressed agreement with the proposition that obtaining more money doesn’t lead to more happiness, that admission has had no noticeable effect on their behavior . . .

. . . Earning more money will not give any one of us lasting happiness. It is in our nature that we adapt to improvements in our lives, whether those improvements arise from more money or other desirable things, so that the additional happiness they bring is temporary. This fact of life, however, is hardly reason for pessimism or for believing
that greater and longer-lasting happiness can be achieved by relying more on government and less on ourselves. There is much wisdom in the commonplace that the journey is more important than the destination. Human happiness comes from striving for improvements and from the sense of achievement gained by overcoming the challenges we face along the way, not from docile dependence on others.11 The happiness gained from struggle and achievement may be temporary, but fortunately our insatiable desire for more of life’s good things guarantees that new struggles and achievements are always available for replenishing our happiness. Furthermore, we can take pleasure in knowing that when we struggle to improve our conditions by pursuing money in the marketplace, we are increasing opportunities for others to improve their conditions as well.Happiness can also be heightened and extended by taking a little time out from our struggles each day to appreciate how much we have achieved already and how blessed we are in comparison with most people who are alive today and almost all who came before us. Consider how much the pursuit of wealth has added to the length, comfort, health, beauty, and meaning of our lives and of the lives of our loved ones.

If that contemplation does not increase your happiness, then do not expect that higher taxes and more government spending on mass transit and recycling programs will do so.