10 Enduring Lessons from Adam Smith
by RickJWagner on 4/7/2026, 12:46:53 PM
Comments
by: throw0101d
> 5. Self-Interest Actually Helps Everyone<p>See perhaps <i>The Fable of the Bees</i> as well, which was published a few years before Smith's birth:<p>> <i>In The Grumbling Hive, Mandeville describes a bee community that thrives until the bees decide to live by honesty and virtue. As they abandon their desire for personal gain, the economy of their hive collapses, and they go on to live simple, "virtuous" lives in a hollow tree. Mandeville's implication—that private vices create social benefits—caused a scandal when public attention turned to the work, especially after its 1723 edition.</i><p>> <i>Mandeville's social theory and the thesis of the book, according to E. J. Hundert, is that "contemporary society is an aggregation of self-interested individuals necessarily bound to one another neither by their shared civic commitments nor their moral rectitude, but, paradoxically, by the tenuous bonds of envy, competition and exploitation".[1] Mandeville implied that people were hypocrites for espousing rigorous ideas about virtue and vice while they failed to act according to those beliefs in their private lives. He observed that those preaching against vice had no qualms about benefiting from it in the form of their society's overall wealth, which Mandeville saw as the cumulative result of individual vices (such as luxury, gambling, and crime, which benefited lawyers and the justice system).</i><p>* <a href="https://en.wikipedia.org/wiki/The_Fable_of_the_Bees" rel="nofollow">https://en.wikipedia.org/wiki/The_Fable_of_the_Bees</a><p>In some ways this can be used to support trickle-down economics (TDE; popularized by Reagan <i>et al</i> in the 1980s, but around for over a century) to allow the rich to keep more money:<p>* <a href="https://en.wikipedia.org/wiki/Trickle-down_economics" rel="nofollow">https://en.wikipedia.org/wiki/Trickle-down_economics</a><p>One problem with TDE though is that you can only really spend so much, even if you go crazy in extravagance (only so many Ferraris and jets that one can purchase), and a lot of the money ends up being saved/invested/hoarded. It's probably better to give more money to 'poor(er)' people, who <i>will</i> probably end up spending more of it just to make ends meet—which is more likely to circulate in the economy.
4/7/2026, 1:48:12 PM
by: throw0101d
Smith's other major book (which came before <i>Wealth of Nations</i>) seems to get less air time:<p>* <a href="https://en.wikipedia.org/wiki/The_Theory_of_Moral_Sentiments" rel="nofollow">https://en.wikipedia.org/wiki/The_Theory_of_Moral_Sentiments</a>
4/7/2026, 1:52:20 PM
by: schmidtleonard
Yeah, but the "rich people get paid for being rich in proportion to how rich they are" parts of the economy <i>do</i> tend to exponentially run away until a big enough shitshow incinerates enough capital to reset the clock.
4/7/2026, 1:46:41 PM