Part 2, The Dangerous Ignorance of Adam Smith (part 2 of 2)

Note: This is a rough transcript. Since the Dangerous Wisdom podcast uses many names and terms that transcription software fails to recognize, a more accurate transcript is not possible at this time. But this version is as close as we can manage.

Listen here: https://dangerouswisdom.org/podcast

Or subscribe via your preferred podcast directory here: https://dangerous-wisdom.captivate.fm/listen

Welcome to Dangerous Wisdom 

We’re picking up with the dangerous ignorance of Adam Smith, and we’re going to get at what seems to me a crucial piece of that dangerous ignorance, something we need to free ourselves from as fully as possible, because it continues to infect out thoughts about capitalism. 

But first I’d like to recognize the conflict we might sense in Adam Smith. 

We can understand why it seems that what Smith proposes appears to go against his own beliefs. That’s in part because he knows very well that he’s not going to find a single venerable philosopher in the history of the world who would endorse this path. 

There’s not a genuine philosophy or philosopher in the history of the world that would say, “What you need to do is measure your life according to how much money you make. Don’t worry about whether or not your culture’s filled with jerks or even filled with villains. Just pass laws, and make them severe enough. Sure, most of the rich guys will get off the hook, but you’ll keep general order. Most people will stay in line with only the threat of violence. So just relax, let it go. You’re here to make money.” 

We’re never going to find any respectable philosopher who says that. And most people know this. Suggesting otherwise would be like suggesting that God judges a culture on the basis of its Gross Domestic Product, and that God judges a soul on the basis of lifetime earnings and general contribution to Gross Domestic Product. In this sense, atheistic materialists like Richard Dawkins and Sam Harris should find capitalism sillier than any religion on the planet. 

We’re never going to find a serious theologian saying, “We need to do things the way God does them, and God has a big ledger in heaven, and when you get to the pearly gates, he pulls out that ledger and checks to see how much money you made, and he’s got a minimum lifetime income and a minimum lifetime contribution to Gross Domestic Product—adjusted for inflation and population, of course. He’s God, after all—he knows what he’s doing.” 

This sounds absurd, but the joke is actually stranger than it may seem, because Smith sort of pulls God in to excuse himself, and to excuse capitalism. 

In a rather comical manner, Smith kind of blames some of the core problems on God. He seems to bring in God in at least two ways. The first comes when he admits that, under the right circumstances, we may come to a clear realization of how foolish capitalism is, how foolish the road Smith recommends really is. 

He gives the example of getting seriously ill. Today, we would call it a brush with death. When people have a real brush with death, it can force them into taking a good hard look at their life. 

And Smith says that, in such moments, we may realize that the pursuit of material wealth, conventional success, and extrinsic, self-enhancing rewards just isn’t worth it—that it’s meaningless. We see how ignorant the whole thing is, and we say, “I’m not doing this anymore.” 

We can also get at this by means of a little reflection. We might go out in Nature for several days, or we might go on a spiritual retreat, or we might just get in touch with our own suffering, we might get in touch with the suffering of the world, or we might get in touch with our soul’s calling. We don’t have to have a brush with death—though sometimes it takes getting shaken up like that, sometimes it takes a real confrontation with our mortality or the loss of a loved one. 

And in such a moment, we remember what really matters, and we see through at least some of the delusions our culture has seduced us into. And then we want to walk away from it all, or at least make a major change in our lives. We say to ourselves, “This changes everything. I’m done. I’m not going to live like this anymore.” And we decide to take the path of wisdom, love, and beauty. 

But Smith says that we’ll usually fall back into our old ways. We may have arrived at what alcoholics call a moment of clarity, but Smith says we’ll pick up the bottle of materialism again, and we’ll get back to the grind of capitalism. 

And in a moment of incredible foolishness, Smith blames this on “nature,” and calls it a good thing. 

We have here entered into some of the dangerous ignorance of Adam Smith. We started off wanting to focus on the dangerous wisdom of Adam Smith, but once we saw the general game Smith decided to play, it became inevitable that we’d come face to face with significant ignorance. After all, Smith recommends the road of ignorance and vice as the foundation for our culture. 

And here he tries to blame, not his own ignorance or even the general problem of human ignorance, but rather he tries to blame “nature”. 

Blaming it on Nature seems like blaming it on God. It’s not clear what religious views Adam Smith had. Since he didn’t have the theory of evolution, it’s not clear what being an atheist would be like for him. Smith may have simply rejected certain conventional religious views, while still imagining some kind of divine presence behind the existence of the universe. 

Anyway, he says “nature” put this dissatisfaction in us. And here he goes sideways from our most revered wisdom traditions. 

For instance, the Buddha also acknowledges this dissatisfaction, and he says that it is in fact not indigenous to the soul, not put here by Nature or God. 

Buddha—like Socrates, Plato, Epicurus, and many other philosophers Smith would have known—these philosophers tell us that this dissatisfaction is a symptom, a sign that we need therapy for our soul. 

In other words: Our dissatisfaction reveals a need for philosophy, and rather than give us a philosophy for healing this dissatisfaction, Smith, as a professor of philosophy, rationalizes our situation in such a way as to keep us stuck in it, and even to deepen our stuckness. 

There’s a part of him that he knows he can’t argue with all these other philosophers and sages. Their teachings seem to accord with reality, and they seem cogent. 

So he rationalizes and says, “Well, nature put this in us.” 

And then he doubles down on this nonsense, which leads him into perhaps his most dangerous ignorance. Smith dangerous ignorance comes across first in his claim that this dissatisfaction prompts us to admire the things wealthy and powerful people have. He says this in turn stokes our drive to pursue the material path—which leads to the most hilarious and ignorant part of his musings about our dissatisfaction: Smith claims that, without this dissatisfaction and hunger for material gain, we wouldn’t have created all the things we have created, and we would have made no progress as a species. 

This is one of the stupidest things any professor of philosophy ever suggested, and puts us far into the territory of dangerous ignorance. It defies belief that anyone would bother to suggest this, since it goes directly against our own experience and the teachings of the wisdom traditions. 

But supporters of capitalism today share the same spirit of this remark. We usually let this go without challenge, and it makes capitalism seem like a force for good, when it is nothing of the sort. 

Human beings are a force for good, and they do the most good when empowered by the most skillful, wise, compassionate, and beautiful philosophies. Capitalism could never count as such a philosophy. 

The suggestion that the good things in life come only from our craving for extrinsic, self-enhancing rewards goes against not only our own experience; it goes against both wisdom and history as well. Either Smith didn’t know his own experience or his experience was sadly anemic. 

The vast majority of the most important discoveries and creations ever made came about because people experienced an intrinsic interest in their work and in their world. They weren’t trying to get money or praise. Rather, they wanted to find things out, they wanted to create, to receive an inspiration, to serve those they loved, and so on. 

We enjoy doing so many things. Joy is indigenous to the psyche, and we enjoy imagination, movement, singing, dancing, thinking, engaging in dialogue, spending time in Nature, and resolving all manner of challenges, puzzles, and problems. We enjoy insight. We enjoy truth and goodness. And we find ecstasy in wisdom, love, and beauty—which includes creative action and skillful relationships. 

And our spiritual values, our intrinsic, self-transcending values, serve as far better motivation than extrinsic, self-enhancing values. We will look a little more into this in another contemplation, but we see this all the time. 

Even in simple things, like the way an amateur can find out things that a scientist or journalist missed or never thought of, or the way a mother can perform incredible feats to save a child. We find love and learning, beauty and sacredness, and other self-transcending motives far more meaningful, important, and consistent in their results. 

In fact, it’s not really helpful to talk about motivation the way we do. We need a better sense of holism in relation to our activities and our intentions. 

We just want to register how wrong Smith got things here. Many of our most creative people have lived lives of poverty or at least modesty and simplicity, and many of our greatest inventors have been ripped off by those focused more on making money—not just our greatest inventors, as if it only happens to the most elite minds, but plenty of artists and creative thinkers of all kinds have learned the hard way how harsh the market can be. While many creative, insightful, and spiritual people seek to live by art and inspiration, by love and liberation, by wisdom and by grace, the capitalist market lives by profit alone. 

We can also see that we don’t put a value on creative people themselves. If a creative person happens to become wealthy, then, according to Smith’s own description, we are happy to idolize them. 

But we don’t encourage people to become painters and poets. We don’t value creativity as much as we value money, and we don’t value creative people as full human beings. 

The faulty logic here emphasizes again the problems with capitalism: We get one kind of world if we value money and put a price on everything, including creative works; we get a very different world if we value creative people and creative ecologies, and if we see the job of a culture as making quality people with creative intelligence—an intelligence in tune with spiritual and ecological reality, an intelligence that knows how to take care of the world we share, and how to help us all take care of each other, to make the world a thriving home. 

Anyway, Smith’s claim is just ridiculous, and it’s startling to find such a silly claim in the work of a seemingly clever intellectual. But, again, the spirit of this claim remains with us in the common refrains about all the good things we have because of capitalism. That’s part of the danger of this kind of dangerous ignorance: It proliferates. 

But the claim that good things come from capitalism only makes sense if we start out wanting to defend capitalism, and we need some rationalization. Otherwise it sounds like a variation on Smith’s claim, which means it sounds empty of substance, even if we may make a strained argument to try and support it. 

It reminds me of the way a foolish young musician might listen to Charlie Parker play the sax, or listen to Bill Evans play piano, and they may find it so wonderful that they want to play that well themselves. And then they find out that Bill Evans and Charlie Parker were heroin addicts, and they figure they will have to get addicted to heroin if they really want to be like their jazz hero. 

But Charlie Parker didn’t play great jazz because of his heroin addiction. Rather, he played great jazz in spite of his addiction. 

Similarly, the good things we have in the world are not because of capitalism. Rather, all the good things we have in this world are in spite of capitalism, in spite of the countless ways it limits and degrades us and the world we share, in spite of all the ways it cuts us off from spiritual and ecological reality, and seeks nothing more than profit. 

This connects with the other place where Adam Smith kind of sneaks God in. He realizes that it makes no sense to say that a system rooted in ignorance can arrive at good outcomes. It’s a utopian move. Capitalism is a utopian concept, a no-place concept which claims a bunch of self-centered people, fueled by fear and craving, will magically create good outcomes, even though they chose the road of materialism rather than the road of wisdom and virtue. 

Smith doesn’t invoke God by name, but it’s the one and only passage in The Wealth of Nations that includes the infamous invisible hand reference. That’s such a famous image that one might imagine that it drives the whole text. Not so. 

I’ll read the passage to you: 

“By preferring the support of domestic to that of foreign industry he intends only his own security; and by directing that industry in such a manner as its produce may be of greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it.” 

One of the things about this passage is that it doesn’t come early in the text. If he had this as a central idea, one might expect to see more made of it. 

He happens to be talking about capital flight in particular, and that makes it unclear if he even intends it to apply to other aspects of capitalism. The point is that he opens the door here for us to engage chase after a utopia, a no-place in which we don’t need wisdom and virtue to create good people and a thriving world. 

Whatever Smith’s views about this invisible hand, capitalism began to depend on it as part of its justification for itself. As we have already noted, economists basically view us all as sociopathic—that we are not just a little self-interested, but that we are primarily so. Smith himself didn’t seem to go that far. He wrote, 

“How selfish soever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it.” 

In some ways, that’s a weird acknowledgement. Because it could have become the beginning of a whole argument for why we should take the road of wisdom and virtue rather than the road of material gain and conventional success. 

Some people think Smith was looking for some sort of compromise. Clearly human beings can suffer from ignorance and can behave in selfish ways. He seems to try and make a distinction between self-interest and greed, or self-interest and vice in general. But he still ends up relying on magical thinking. 

And we can see this with Smith’s moves to blame our problems on Nature or God, and then to try and sneak God back in the form of an invisible hand that can fix the problems inherent to the system Smith endorses. 

Here Smith’s dangerous ignorance extends to his lack of understanding of the problem of human intention. That’s a complex problem, and maybe we can let him off the hook. But failing to understand dissatisfaction seems unforgivable in a philosophy that has had such a big inlfuence on our lives and on our world. 

Smith tries to say that dissatisfaction drives us to seek material gain and conventional success, while Buddha and many other philosophers taught that this deep dissatisfaction goes together with ignorance, and therefore we must do everything we can to prevent it from driving our actions—which would include preventing it from driving economies and cultures. 

Philosophy has to do with healing that dissatisfaction, not letting it drive our life and our culture, and then rationalizing when good things happen in spite of this foundation of ignorance. So we must admit that Smith abandoned philosophy and became a source of rationalization for the activity of ignorance. 

If we want progress and we want good things in our lives, the wisdom traditions teach us to arrive at them by following the path of wisdom and virtue. Only if we can end the self-deception capitalism has seduced us into will we be able to create the better world we all know is possible. 

If you have questions, reflections, or stories to share about your experience with the dangerous wisdom of Adam Smith, or the possibilities of life beyond the system we have, get in touch through dangerouswisdom.org We might be able to bring some of them into a future contemplation. 

Until next time, this is dr. nikos, your friendly neighborhood soul doctor, reminding you that your soul and the soul of the World are not two things—take good care of them.