On Self-Interest and Old Books

You might remember the scene in A Beautiful Mind where Russell Crowe as John Nash is inspired to develop his groundbreaking ideas. It’s good cinema but bad social science and worse history. It makes the case for spending a little more time reading old books and a little less time trying to speak or to hear some new thing.

The scene shows Nash and his Princeton grad school buddies sitting in a bar leering at a group of women who just walked in and debating who will win the most beautiful member of the group. One of the guys exhorts the group to remember their Adam Smith and says, “in competition, individual ambition…” and everyone else says in unison, “serves the common good.” In a flash of insight, Nash explains how actually, if they cooperate, they are much more likely to get the sex they want and exclaims “Adam Smith was wrong” before dashing off to do some academic scribbling in his fit of inspiration.

The reader might protest: ”But it’s a movie.” Right, but the scene illustrates some all-too-common intellectual sins. First, there’s misremembering what people actually said or wrote—forgivable in the pre-internet age but less so today. Second, there’s misstating what people actually meant, which is easier to do if you’re not careful. Adam Smith never wrote or said, “in competition, individual ambition serves the common good” or anything like it. Most importantly, he never meant anything like that. Adam Smith wasn’t wrong. The people who wrote the script for A Beautiful Mind were wrong.

The superficial reading of Smith, alas, is a hardy weed. Based on the most superficial readings of snippets from Smith, generations of scholars have worked as if Smith could have written Gordon Gekko’s “Greed is good” speech from the movie Wall Street. Smith’s moral philosophy and economics were far richer and more complex than a recommendation that we all behave as selfish, narcissistic children trying to grab all we can.

What Smith wrote and meant, and how he understood the tensions and complementarities between competing virtues, is much richer than the “grab all you can” straw man (which people have torched repeatedly over the last two and a half centuries). If we had read him more carefully, we could have saved a lot of wasted ink, time, and paper—and perhaps moved along a more constructive intellectual path, such as the one that renewed Smithian scholarship under the loose names “mainline economics” and “humanomics” is just now starting to recover.

Out with the new, in with the old? Hardly, but books become classics when they address timeless issues relevant to every generation and geography. We habitually build analytical structures on intellectual quicksand in our haste to come up with something new and different. Devoting more time and attention to the timeless classics and less to what is So Hot Right Now would put us on more solid ground 

Of course, it’s easy to go too far. As a journal editor and reviewer, I’ve read far too many papers where authors claim to have identified a gap in the literature when what they really reveal is they haven’t read anything written in the last twenty years. Assuming you’re keeping up with what is most directly relevant to your narrow specialization, however, it’s a good idea to reach for one of the classics regularly—The Theory of Moral Sentiments is never a bad option—rather than what’s hot off the presses.

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Deirdre McCloskey and I discuss this scene specifically in our 2020 book Leave Me Alone and I’ll Make You Rich: How the Bourgeois Deal Enriched the World.

Want more?
Why Read the Classics in Economics? by Peter Boettke at Econlib
Think about old wisdom and new paternalism with The Great Antidote and Erik Matson
Was Adam Smith Wrong? Mutual Sympathy and A Beautiful Mind by Marko Veckov