The Dangerous Wisdom of Adam Smith

Reading Adam Smith yields some unexpected gems of dangerous wisdom. Here are three of the most important — all interrelated. Since this is dangerous wisdom (as the best wisdom always is), caution is advised. This sort of thing can feel provocative and can lead us into the unknown.

Adam Smith’s First Gem of Dangerous Wisdom

In considering capitalism, Smith says we face a fork in the road, a decision between two very different paths: The path of wisdom and virtue on the one hand, and the path of capitalism on the other.

That should give us pause. If we find ourselves at a fork in the road, and one path has sign marking it, “The Path of Wisdom and Virtue,” what might we expect the other path’s sign to say? The sign may read, “Capitalism,” but, given the other sign, which marks “The Path of Wisdom and Virtue,” we can sense that the other path might have the far more fitting name, “The Path of Ignorance and Vice”.

This is a nuanced point for various reasons, not least of which that Adam Smith didn’t invent capitalism, and he didn’t even use the word. He does refer to “capital,” but not to “capitalism”. Thus, he didn’t name the other path “Capitalism,” but we now refer to roughly what he had in mind by that name.

The main issue has to do with this astonishing choice he presents us with: Shall we choose wisdom and virtue . . . or that other path?

Adam Smith’s Second Gem of Dangerous Wisdom

Smith acknowledges that only the path of wisdom and virtue can bring us true happiness and peace. This makes the true wealth of nations a matter of the level of wisdom, love, and beauty in the culture, not profits or gross domestic product.

This, too, should give us pause. Not only does it seem that Smith believed this himself, but he also knew full well that every venerable philosophical, spiritual, and religious tradition agrees. It’s a common ground of wisdom, and Smith couldn’t possibly reject it without getting laughed out of court by his fellow citizens.

Adam Smith’s Third Gem of Dangerous Wisdom

Smith says the path of capitalism can never bring us true happiness and peace, and that chasing wealth, power, fame, and conventional success amounts to chasing frivolous trinkets. That’s right: frivolous trinkets. So says Captain Capitalism himself.

What Makes This Dangerous Wisdom?

The simplicity of these gems of wisdom could obscure the danger they present to structures of power “inside” of us and “outside” of us. If we could receive these three gems of wisdom, we would become too wealthy and powerful for the present system to dominate us any longer, and we would realize the need to heal and transform ourselves and our world.

Thus we find a tragedy in this dangerous wisdom, because Smith (perhaps lacking courage, or perhaps out of dangerous ignorance) ends up endorsing a path of life — a path for entire nations of people — that he himself acknowledges as a path of chasing frivolous trinkets that can never secure our true happiness and peace.

Smith reflects on this dangerous wisdom in several ways, both in An Inquiry into the Nature and Causes of the Wealth of Nations, and in his earlier work on ethics, The Theory of Moral Sentiments. We can consider just one example that makes the point rather clear. It comes from his Theory of Moral Sentiments:

“What the favourite of the king of Epirus said to his master, may be applied to men in all the ordinary situations of human life. When the King had recounted to him, in their proper order, all the conquests which he proposed to make, and had come to the last of them; And what does your Majesty propose to do then? said the Favourite. — I propose then, said the King, to enjoy myself with my friends, and endeavour to be good company over a bottle. — And what hinders your Majesty from doing so now? replied the Favourite.

“Examine the records of history, recollect what has happened within the circle of your own experience, consider with attention what has been the conduct of almost all the greatly unfortunate, either in private or public life, whom you may have either read of, or heard of, or remember; and you will find that the misfortunes of by far the greater part of them have arisen from their not knowing when they were well, when it was proper for them to sit still and to be contented. The inscription upon the tomb-stone of the man who had endeavoured to mend a tolerable constitution by taking physic; ‘I was well, I wished to be better; here I am’; may generally be applied with great justness to the distress of disappointed avarice and ambition.” TMS III.3.30–2

Maybe Smith’s unconscious mind put this image forward for us — because Adam Smith comes across as rather incoherent. By that I mean Smith recognized the deep faults of what we call capitalism while still recommending it.

We’re not talking about surface problems or something like a nuanced or paradoxical view. Nor can we credit Smith with transcending the “foolish consistency” that Emerson called “the hobgoblin of little minds.” Smith wasn’t that level of genius, and he most certainly was no sage.

Rather, Adam Smith recognized fundamental problems with taking the road of materialism over the road of wisdom and virtue. And then he recommended doing it anyway. That’s incoherent. Incoherence is a hobgoblin of little intellectuals — a mischievous spirit of their mental household that reveals their lack of deeper wisdom. Socrates made a lot of enemies by conjuring forth the incoherence of his fellow citizens — including the rich and famous.

This story about the king of Epirus, along with other ideas and stories Smith shares, makes it rather clear that following the road of ignorance and vice — the path of materialism, the path of capital, the path of extrinsic, self-enhancing values — can make us unable to see that we’re okay, unable to cultivate the nature and causes of being truly well.

The pattern of insanity we refer to as capitalism cuts us off from the great perfection of life and the great connectedness of life, and it puts peace and happiness somewhere in the future, after we get plenty of material stuff that can’t make us truly okay.

What a tragic situation: We go down a road thinking it will make us happy, but it is precisely that road which will cover over our happiness and put us out of touch with happiness and peace. We may find that humanity’s tombstone will read, “We were well, we had no idea how to be better; here we are.”

None of this means people can’t find relative pleasure and relative contentment in the system we have. Clearly we can project meaning into our lives. And when we have enough money, that money can insulate us from a lot of catastrophes that would otherwise cause suffering for us. So, there’s a way in which we can use materialism to make our lives rather comfortable — in a relative sense. And we can use materialism to make the ego feel satisfied and even important. Smith acknowledges this.

But the wisdom traditions are very clear about the core issue, and Smith agrees with them: We can’t get true happiness and peace outside of wisdom, love, and beauty. And those don’t come from the marketplace.

Acknowledging the Dangerous Systemic Flaws of Capitalism

We could see this as one of the strangest features of the capitalist marketplace we have made so central to our culture: That it will never give us what we most need and value.

However, we all exist in a complex medium of propaganda and indoctrination that seduces us (or programs us) into thinking that, whatever good has happened over the past 200+ years, we have to credit that good to capitalism. Catastrophes happen either by acts of God or because of socialism or government regulation.

The willful degradation of ecologies for profit; the epic levels of pollution in our air, water, and soil, as a consequence of profit-seeking; the mind-boggling levels of inequality arising from profit-seeking; various forms of ignorance and injustice rooted in our economic and political systems and their resulting inequality; the amassing of obscene amounts of money and material objects; the rates of cancer and other diseases from smoking, poor diet, and from various forms of toxicity and stress in our work and home life . . . none of this has anything to do with capitalism itself — according to our rationalizations.

If our own soul leads us to think we should refuse to accept these things, loud voices chime in to remind us that we have one and only one other choice: Stalin or Mao. That’s two choices, but who’s counting? And what are they counting? What really counts anymore? Certainly not wisdom and virtue.

How the Wisdom Traditions of the World View Capitalism and Culture

Adam Smith comes across as more a professor of philosophy than a true philosopher. Genuine philosophers like Plato, Buddha, Confucius, the Peacemaker, and countless others understood that no culture should focus on making products — certainly not any culture that wants to endure and thrive. Rather, a healthy culture must focus on making people — which, among other things, means cultivating consciousness in the most vitalizing ways.

A culture cannot truly flourish on the basis of material gain. It may do so for a century or two, especially if it has resources it can still exploit and ecologies it can still degrade. But eventually, reality will catch up.

A culture can truly flourish only on the basis of spiritual and philosophical development, the active rootedness in, and cultivation of, wisdom, love, and beauty — the true wealth of nations.

This applies to the individuals of the culture as well. And, because of the interwovenness of Nature and culture, this applies to the World we share. Indeed, we must make explicit a non-anthropocentric view: Cultures don’t just make people; cultures make the World.

Human cultures do this, but so do horse cultures, bee cultures, beaver cultures, ant cultures, oak cultures — and the interwovenness of these with human cultures. We humans need to ask what kind of world we want to make: one that aligns with our highest values, or one that falls apart under the weight of ignorance and the pursuit of profit; a world that collaborates with all the other beings on whom we depend, or a world that keeps us atomized and self-centered?

Sadly, Smith abandons the sacred commitment to making people, making culture, and making the World (making them wisely, gracefully, beautifully; making them collaboratively, creatively, compassionately), instead recommending the path of making products to sell, the path of making money, and exploiting everything and everyone we can to do so. We can find many lessons in this, not least that Smith clearly demonstrates the fact that economics is a philosophical matter.

Smith also helps us to see that our current economic regime emerges from exceptionally bad philosophy, philosophy that goes against our own wisdom traditions and even our own experience and knowledge (including our science). We find it hard to resist this virulent infection from bad philosophy because the invading agent itself has an immune system that resists and even preempts the recovery of our health and sanity. Capitalism’s immune system puts bad philosophy to work every day, to keep the pattern of illth and insanity going.

Our Philosophical Crisis — A Crisis of both Values and Identity

Capitalism’s immune system functions in part by getting us to identify with capitalism and markets and do their bidding (sort of like the fungi that turn ants into zombies). It has hooked into our identity, hooked into our consciousness and our unconscious too, such that conservatives, for instance, claim free market capitalism as a conservative value. Does that make any real sense?

This identification process affects even those who may critique capitalism. And, because capitalism has such a pervasive presence in our culture, because it hijacks our identity and our thought, we are all forced to ask:

What are we?

What might we become?

Are we consumers?

Are we workers?

Are we “influencers”?

(What exactly do we think we influence?)

(And what has already influenced us and the general context?)

Are we “thought leaders”?

(What kind of thought is actually allowed here?)

Are we capitalists?

Are we more than what an economic theory says we are?

Very few of us count as capitalists in the traditional sense, but if capitalism has hooked into our identity, hooked into our consciousness and our unconscious too, then what are we?

Whatever else we might say in answer to this question, it seems that, to varying extents, under the influence of capitalism, we are the consumed — all of us, even the capitalists, and even those who rebel against capitalism . . . capitalism itself still consumes us all; it consumes all humans and all our non-human kin. And it constrains our consciousness.

Through the style of consciousness that captured Smith, we have continued to double down on a pattern of insanity, and that has allowed things to get further and further elaborated. Millions of people work 40, 60, 80 or more hours a week elaborating the capitalist regime, and thus their incredible combined effort drives us all further and further down the road Smith saw as incapable of making us happy and at peace, the road we now see delivering devastating consequences for the ecologies we all depend on, which includes our fellow human beings and our non-human kin.

Walking a Better Path — How Do We Evolve?

Defenders of capitalism always ask, “What’s the alternative?” Even caring, open-minded people wonder, “What else could we do?”

Well, if we had the smartest and most creative people in our society — and in fact if we just had everybody in our society — working 20, 30, 40 hours a week or more on wisdom, love, and beauty; if we had everyone working to create a culture rooted in wisdom, love, and beauty; if we had everyone focused on producing truly wise, loving, and beautiful people, then we would have a completely different world.

In many ways we should find our situation astounding. Imagine someone said the following:

“I think we should organize our society on the basis of a system that emerged from the contingent historical development of one particular stream of conquest consciousness. It’s not a system developed by wise, compassionate, and graceful people employing all their creativity and insight. In fact, it goes against wisdom and virtue, and it fails to attune with the values most of us hold dear. But I think we should go with it, even though it cannot make us happy or at peace with ourselves, each other, and the world. As for our values, we’ll just have to see if we can uphold them to some degree in spite of a system that fails to accord with them.”

Imagine someone else says this:

“I think we should organize our society on the basis of the values we hold most dear. We will just have to work together to come up with an economic and political system that accords with those values and helps keep us attuned to them. It may require all our collective creativity and intelligence, and the insight of the wisest and most compassionate among us. But this is the only thing that makes sense. How can we live if we don’t prioritize our highest values? How can we live if we don’t prioritize wisdom, virtue, happiness, and being at peace with ourselves, each other, and the world?”

What seems most sensible? So far, for most of the good things we have in the world, we have them in spite of capitalism, not because of it. Why should we keep carrying a burden that interferes with our optimal functioning, our fullest potential, and our own highest values?

In our culture, “disruptors” never really disrupt. Rather they extend, elaborate, and sometimes deepen the pattern of insanity. At the same time, they exhibit the inherent creativity of the soul, the hunger to make things better, the calling to help, and to engage in mutual liberation.

But if we will ever find a way to dispel the pattern of insanity that has us in its grips, we need a new way of thinking, a new style of consciousness, rather than endless variations of the conquest style of consciousness that characterizes the system we have — the system that has us. That requires a shift from mere “disruption” to education and evolution, creativity and collaboration, a liberation into larger ecologies of mind.

If we want to know how we can have something better — not better stuff, not better iPhones and other junk that won’t make us happy, but a better world — if we want a better world filled with better versions of ourselves, we need to start asking people to think in that direction, start teaching better ways of knowing that will allow us to shift our style of consciousness out of the present status quo and into something truly wise and virtuous.

If everyone is thinking down the wrong road, if they’re spending 40–80 hours a week on the road to perdition, then — in all likelihood, and unless we do something different — we’re going to get there. And we seem to have gotten shockingly close already.

We can begin to understand all of this in a way that helps us find common ground. Whether we consider ourselves liberal or conservative, we can find this common ground, and begin to heal the divisions in ourselves, our cultures, and our world.

That common ground is the very one Smith acknowledges, and then tragically recommends we abandon. If “we are lived by powers we pretend to understand,” do we want to be lived by capitalism — lived by profit, power, pleasure, and fame — or do we want to be lived by wisdom, love, and beauty, lived by true peace, wonder, and joy?

To think through these matters more fully (including hearing some key passages from Adam Smith himself), and to listen to a dialogue with rebel economist Della Z Duncan, check out the Dangerous Wisdom podcast. I’ll add some links in the comments.