How Adam Smith Can Change Your Life



I take the ideas in Smith's little-known masterpiece, The Theory of Moral Sentiments and apply them to the modern world—lessons for work, family, friendship, and how to live the good life.

“A great book. Makes you feel better about life, humanity, and yourself. Like having a conversation and a scotch with Adam Smith, or even better, Russ Roberts."

—NASSIM TALEB, author of The Black Swan


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The Human Side of Trade

Free trade is on the run. The president-elect of the United States calls the free market the “dumb market.” He wants to renegotiate past trade deals. The death spiral of manufacturing jobs makes people wonder if trade with China was really such a good idea. Some economists claim to have found evidence that increased trade with China causes an increase in suicide. It is tempting to argue then, that free trade, while good for the economy, is not so good for human beings.

Trade has undeniable human costs — dislocated and unemployed workers, some of whom struggle to find dignified ways to support themselves and who may be left with dreary lives without meaning. What are the benefits? One benefit is obvious — less expensive clothes, toys, and gadgets. But if that’s the end of the story, it’s a pretty bad deal.

But it’s good for the economy! It’s efficient! That’s the free market way! These are inadequate and irrelevant justifications. What we care about is how trade affects our daily lives as workers and consumers. If trade is about getting cheap stuff at the price of wrecking millions of lives, then the American people and its leaders would be right to reject it.


  • 12.12.16

Wanting to want what we want

I have been thinking about consciousness recently. What is the source of human consciousness? Is it merely physical? Can it be uploaded? Duplicated via artificial intelligence? Will machines get conscious enough to feel and to care the way we do? This brief essay pulls together my thoughts on these issues linking some reading and thinking I’ve been doing on consciousness with a number of conversations I’ve had recently for EconTalk on artificial intelligence. It’s my way of trying to see how these ideas fit together, at least in my own consciousness. Perhaps you will find it of interest.

Philosophers David Chalmers and Thomas Nagel have raised the question of whether it is possible to have a scientific/material explanation of consciousness. Chalmers has argued we’re going to need a new biology. Nagel has written that the “materialist neo-Darwinian conception of nature is almost certainly false” suggesting that if current theories of evolution and biology and chemistry cannot explain consciousness, then they are not just incomplete but deeply flawed overall and unsatisfying. I take his challenge to be something along these lines: how is it that the most distinctive feature of the creature who ponders the source of life on earth has not developed an explanation of how we feel when we’re doing the pondering? That’s a little melodramatic perhaps but the gist of it is that the essential feeling we have of being alive and the texture of daily life seems hidden from standard materialistic scientific explanations. Chalmers calls it “the hard problem” of consciousness. The issue is even more interesting because Chalmers and Nagel are both non-believers who reject a divine explanation for consciousness.

What is the hard problem of consciousness, exactly? READ ARTICLE »

  • 06.20.16

The Data in the Wells Report

I’m biased. I’m a Patriots fan. I wanted the Wells Report to exonerate the Patriots, their staff, and their quarterback. It did not. The question remains as to whether it’s accurate.

There are many damning facts in the Wells Report. Texts. Unexpected bathroom adventures. A reference to a needle and a reference to a deflator. Are there innocent explanations for those facts? Maybe.

But it wouldn’t surprise me in the least to discover that Brady encouraged Patriots employees to push the envelope on the low side of the legal psi limit. He apparently likes the ball softer than harder. Maybe they had an “understanding.” No smoking gun, no explicit texts, but winking and nodding. Very possible. Maybe “probable” or “likely” as the Wells report concludes. There’s circumstantial evidence pointing that way. (And if there was any evidence pointing in an opposite direction, the Wells Report chose not provide it.)

But as a data guy, I’m interested in the data the Wells Report provides and whether it reinforces the circumstantial evidence. What I’ve tried to do here is bring out some issues I have not seen discussed elsewhere related to the data. We’re going deep into the weeds.


  • 05.13.15

Recent Reviews for Adam Smith

“How Adam Smith Changed My Life” by Austin Frakt The Incidental Economist, 5/8/15

“Adam Smith Preached Self-Interest–and Self-Help, Too” by Robert Litan WSJ, 4/25/15

“Adam Smith and the Quackish Arts” by Clive CrookBloomberg, 2/15/15

  • 05.11.15

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Wonder, Bread

This is my poetic homage to Adam Smith, Frederic Bastiat, and F.A. Hayek–my attempt to capture the idea of emergent order. It was the closing part of my recent appearance as Adam Smith as part of Money Lab.

Wonder, Bread

If you look down upon a city with the widest bird’s eye view
You might wonder how it functions, who takes care of me and you?

Who makes sure there’s food for vegans, and for carnivores as well
It seems like there’s a wizard who has cast a magic spell

Just think of one small part—who makes sure there’s so much bread?
You want rye, she wants ciabatta, or make it sourdough instead

A baguette or a croissant, it doesn’t matter, don’t you see?
You get yours and she get hers, and I get mine, how can that be?

One’s buying a dozen bagels to grace an impromptu brunch
One’s using food stamps for a simple loaf to make her children lunch

No matter the amount we require, no matter the choices we make
An army of workers has mobilized to fashion the bread we partake 

The farmer who grows the wheat, the miller that grinds the flour
The baker and all of the others who work hour after hour

They’re all on their own, each one making independent decisions
But somehow their plans fit together with the highest degree of precision 

So there must be a czar of wheat and flour, of trucks and of bread and yeast
To allocate and oversee and plan at the very least 

For the unexpected change, what if today’s not like yesterday
It never is, though, is it? So who keeps chaos away?

Because there’s order all around us. Things look as if they’re planned
Like the supply of bread in a city–enough to match up with demand

And though flour is used for more than just bread, we never have to fight
Over where it goes and who gets what. So why do we sleep so well at night

Knowing nobody’s in charge, it looks like all is left to chance
Yet in New York, or London as well as Paris France

No one’s worried the shelves will be empty, we take supply for granted
But it’s a marvel, it’s a miracle, the world’s somehow enchanted

Of course the result’s never perfect, but the system’s organic, alive
Over time fewer people go hungry and more and more bread-lovers thrive

And if you’re allergic to gluten, there are sellers who work for you, too
Your choices expand and what you demand is created and waiting for you 

I have my tastes and you have yours, we each have our own urges
Yet somehow there’s no conflict, a harmony emerges. 

Our dreams can fit together like a quilt that’s someone weaves us
But there isn’t a weaver of dreams, the reality deceives us

And here’s the crazy thing, if someone really were in charge
To make sure that bread was plentiful, with power to enlarge

The supply of flour, yeast and of bakers, ovens, too
Would that person with that power have any idea of what to do?

Could a minister of bread do even half as well
Would there be enough of every kind of bread upon the shelves?

How could he know how much to make of each kind every day?
There’d be shortages and surpluses and waste and much dismay.

You might think the job is easy–if the top seller’s rye
Then for every variety push production up that high

Then no one’s disappointed bread eaters will rejoice
When they see that every bakery is filled with so much choice

Bread eaters yes, but “Help!” the forgotten pizza lover cries
All the flour’s gone to baking bread there’s none left for the pies

Of pepperoni, deep dish, thin-crust and Sicilian
You’ve solved the bread challenge, yes, but created another million

Problems. No problem! We’ll just grow lots more wheat
But that means less of something else that people like to eat

Which only makes the puzzle of the harmony around us
Much more puzzling—this order, this peace has to astound us

So many things we count on, yet no one’s behind the curtain
No wizard, no controls, yet the supply of stuff–near certain

Every morning the bakers rise early to make sure your bread is fresh
And the world gets more complicated but the plans just continue to mesh 

Every morning the bakers rise early, though not under anyone’s command
Where in the anatomy textbooks can I view an invisible hand?

The key to the process is prices and the freedom to shop where you want,
Competition among all the bakers, makes sure that they rise before dawn

To make sure the bread’s near perfection, to make sure that the buyer’s content
You don’t have to know economics to know when your money’s well-spent
We know there’s order built into the fabric of the world
Of nature. Flocks of geese! Schools of fish! And every boy and girl

Delights in how the stars shine down in all their constellations
And the planets stay on track and keep the most sublime relations

With each other. Order’s everywhere. Yet we humans too create it
It emerges. No one intends it. No one has to orchestrate it.

It’s the product of our actions but no single mind’s designed it.
There’s magic without wizards if you just know how to find it.

  • 03.25.15

My appearance as Adam Smith

This Sunday, March 22 and this Monday, March 23, I’ll be appearing at New York City’s HERE Arts Center as Adam Smith as part of Money Lab. Money Lab is an economic vaudeville–a set of rotating acts related to economics, art and theater. Tickets are $20 with a $5-$10 buy-in that gives you tokens to use for the interactive part of the evening. Money Lab runs March 20 through April 11. My shows are only those two days, though. First week (which includes my shows), use the code UTC61 and get tickets for $10.

My performances are Sunday at 2 pm and 7 pm, Monday at 7 pm. (You can find out about the rest of the Money Lab performances, here.) I’ll be talking about Smith’s insights into harmony and reciting an original poem on emergent order. World premiere. Oh, the excitement. Should be fun, actually. My one-man act is 5-10 minutes. There are three other acts at each performance and some interactive stuff as well. Hope to see you there.

The other acts are:

Sunday, March 22 at 2pm:

Dead Cat Bounce – Patrice Miller
A dance to the jargon of 2008 collapse
With Laura Hartle, Stephanie Willing, and Dina Rose Rivera.

Letters to Engels – Avner Finberg & Edward Einhorn
A short solo opera. Marx sings three of his letters to Engels.
With Jonathan Kline, Maria Dessena (piano)

The Money Atheist – Edward Einhorn
Monologue on the origin of money, in a futuristic world of the Money Church.
With Moira Stone

Sunday, March 22 at 7pm:

Journey to Yap – Edward Einhorn and Chris Chappell
An interactive audio drama about a journey to a place where stones are money
Sound: Chris Chappell, Voice: Ian W. Hill

Love und Greed (An Economic Collapse Cabaret) – Mad Jenny und Ensemble
An international array of songs written in difficult financial times
With Jenny Lee Mitchell, Ric Becker (trombone), Maria Dessena (piano), Marty Isenberg (bass)

Magic act – Magic Brian
A five card monte, of sorts, frameworked by questions about gambling and the stock market

Monday, March 23 at 7 pm:

Dead Cat Bounce – Patrice Miller
A dance to the jargon of 2008 collapse
With Laura Hartle, Stephanie Willing, and Dina Rose Rivera.

Love und Greed (An Economic Collapse Cabaret) – Mad Jenny und Ensemble
An international array of songs written in difficult financial times
With Jenny Lee Mitchell, Ric Becker (trombone), Maria Dessena (piano), Marty Isenberg (bass)

The Money Atheist – Edward Einhorn
Monologue on the origin of money, in a futuristic world of the Money Church.
With Moira Stone

  • 03.17.15

What economists can learn from The Theory of Moral Sentiments

This is a video of a talk I gave at the World Bank taking the lessons from The Theory of Moral Sentiments and seeing how they might apply to how we teach economics and think about public policy. It’s a topic I hope to continue to think about. And here is Vernon Smith on EconTalk in a similar vein and my follow-up to the conversation.

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  • 11.27.14

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Financial Times Review

The Financial Times has a nice review of my Adam Smith book. Here’s how it opens:

As any Financial Times reader can tell you, Adam Smith was the original Gordon Gekko, insisting greed is good – and championed by UK Prime Minister Margaret Thatcher, a devotee of his Wealth of Nations.

However, it turns out that this view is a misconception – one that Russ Roberts seeks to redress in How Adam Smith Can Change Your Life by showing how the grandfather of the dismal science can make you a better, happier and more fulfilled person.

Roberts, a Stanford economist, does so by whisking the reader through Smith’s “hidden gem”, The Theory of Moral Sentiments. This treatise was the work for which Smith cared most. Beautifully written, it was first published in 1759 but he revised it until just before his death in 1790.

The Theory of Moral Sentiments puts Smith’s invisible candlestick-makers and unbenevolent bakers aside and instead shows him pioneering what is now called behavioural economics – or, more prosaically, the study of what it means to be human. As Roberts skilfully shows through the words of Smith: “economics is about something more important than money”.

  • 11.27.14

Psychology Today Review

William Irwin reviews How Adam Smith Can Change Your Life at Psychology Today. Irwin gets what I’m trying to do and does a nice job explaining what I actually did. One of the more thorough pieces on the book so far:

In How Adam Smith Can Change Your Life Russ Roberts does not focus on The Wealth of Nations, but rather on Smith’s other major book, The Theory of Moral Sentiments. Smith founded the study of economics, but his training and education were in philosophy, and The Theory of Moral Sentiments is very clearly a work of moral philosophy. Part of Smith’s message in this book is that we should not pursue fame and fortune. Why? Because such pursuits and even accomplishments will not make us happy. Tellingly, the subtitle of Roberts’s book is An Unexpected Guide to Human Nature and Happiness.

Roberts and Smith deliver on the implicit promise of the title and subtitle. I must confess that I have not read Smith’s The Theory of Moral Sentiments. Very few people have these days. But having read Roberts’s book, I am now going to read Smith’s neglected classic. In the pages of Roberts’s book, Smith comes across as a brilliant psychologist and theorist of human nature.

  • 11.19.14

Radio Appearance on THINK

Kris Boyd of THINK (out of KERA–public radio in Dallas) interviews me on Adam Smith. Lovely questions and interesting discussion.

  • 11.05.14