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Adam Smith’s Paradise Lost 28 octobre 2008

Par Thierry Klein dans : Altruistic Capital - in english,Posts in english.
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Jean-Pierre mentioned in his comments that my idea of altruistic capital is doomed since “Marxist attempts have always failed”.

I don’t think there can be any ambiguity upon reading my paper but I will say it again. The concept of Altruistic Capital is in no way related with Marxism. It would actually be more of a free-market idea.

About twenty years before The Wealth of the Nations, Adam Smith wrote a small book less popular but from my point of view more interesting: The Theory of Moral Sentiments. It’s not as much a book on economy than on moral or social issues (social as in Rousseau’s Social Contract). Adam Smith analyses human characteristics, according to Pareto it’s one of those – individualism – from which modern day free market theories derive.

However according to Adam Smith, man also has “sympathy” in him.

In this context this word doesn’t’ have its usual meaning. According to Adam Smith sympathy is the ability to feel other people’s emotions by stepping in their shoes. It’s a sort of empathy to which we rise thanks to our ability as a human being to imagine ourselves in someone else’s situation. (This is an actually very interesting partly religious, partly psychoanalytic concept that I will further address in another post).

Why does this sympathy disappear in The Wealth of Nations (and then in Pareto’s)? It’s not so much that it no longer exists but that it’s of lesser importance.

The main reason being that you can’t really draw a model out of it and Adam Smith wants to develop a scientific theory.

He disregards it in order to focus on a mathematical model, not for other reasons.

(It can also be argued that sympathy is actually a part of « self-love », as Adam Smith defines it. Sympathy, as defined in TMS, that Adam Smith never denounced, clearly benefits to the self. Modern liberal economists suchs as Friedman have obviously overlooked that point).

I will give an example rather interesting and well-known. In order to invent classic mechanics, Newton needs to separate time from space: he doesn’t have the mathematical or experimental material to go forward without that imposition.

Contrary to what is now believed, this notion of time being independent from space is not that straightforward: back then time was actually only measured by motion through clocks themselves based on the revolving of the earth around itself, around the sun and gravity – and Newton knows it.

Basically time seems linked to motion and Galileo and then Newton boil it down to an independent variable not out of some philosophical concern but in order to go forward with their work. Newton’s doubts on whether time is indeed an absolute variable are evident in his Principia.

In the end classic mechanics are actually rather close to the truth, till Einstein restored time back to its real place by linking it to space and motion (resulting in The theory of General Relativity).

What I’m saying here on Relativity is quoted from Einstein himself. Einstein wonders why “Newton, the great Newton” talked about absolute time and justifies this by saying “He couldn’t do it any other way”.

The same thing happens with the free-market concept. The altruistic characteristic of mankind has been disregarded because it was far too complicated to fit it in a mathematical model – or because it has actually always been there but the words « self-love » lead to some confusion.

Seen like, this Altruistic Capital is a practical rather than theoretical attempt to inject a dose of altruism into the free-market. And from my point of view there should be many others.

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