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Chapter 1
Introduction
Adam Smith (1723–1790) is considered the father of modern economics, an influential moral philosopher of the 18th century and was a key member of the Scottish Enlightenment. We will provide a brief biographical summary at the conclusion of this chapter.
This book introduces a range of psychoanalytic perspectives on the work of Adam Smith to illuminate the important psychological content embedded in his work, identify the salient issues within this content and evaluate their significance to the structure of morality and social relations. The primary source material that we will be examining is The Theory of Moral Sentiments (TMS). It has been recognized that while Smith was not writing as a psychologist, there are several important applied psychological processes embedded in his philosophical writing. Given that the first laboratory of experimental psychology and the first work in psychoanalysis were not to begin for over a hundred years after Smith’s time, he could not have known that in addition to establishing a moral philosophy, he was also giving rise to a moral psychology based on interpersonal interactions.
Through a psychoanalytic examination of Smith’s work, we attempt to uncover the psychological concepts that are present but not at the forefront of Smith’s work. While looking at the psychological processes that are active in his work, we put together a critique of the strengths and limitations of the psychological concepts that are implied in his theory and suggest an expansion of the understanding of his work from a psychoanalytic perspective. This book seeks to bring into explicit awareness not only the conscious intent of Smith’s work but also the unconscious implications of his theory, including its application. The unconscious meanings from Smith’s work are examined using the Hermeneutic tradition. The Hermeneutic tradition has a special significance for psychoanalysis (Loewenberg, 2000). As in philosophical Hermeneutics, in psychoanalysis several possible interpretations and multiple meanings are considered and integrated. In so doing we look to expand the understanding, the pragmatic application and the strengths and limitations of this ground-breaking work.
To accomplish this, we look at Smith’s theory from several different psychoanalytic perspectives. We examine Smith’s attitude and understanding of the instincts (what Smith calls passions or sentiments) and his antipathy to them. We assert the perspective that instincts are the reason for a moral theory and that they are more than just a force to be disliked and worked against; they serve an important purpose for human kind, not the least of which is procreation and the capacity to develop and defend our integrity. Further, we study the foundational interactive basis of Smith’s theory and the possibilities that this interactive process potentiates. We examine the necessity for ego capacity that Smith highlighted in his pivotal assertion of the primacy of self-command. Integral to individual function, we then go into the evolution of defensive styles and the potential for the integration of defenses, which allow for a greater humanization of defensive processes that facilitate a more genuine self that grows out of ongoing interactions. This humanization is facilitated by the incorporation of the sympathetic/empathic process. While it is tempting to simply contrast a more contemporary view with an older view and proclaim the more modern one to be better, once again, we endeavor to point out the foundational strength of Smith’s work and its limitations.
The TMS was originally published in 1759, and was translated to both French and German soon after its publication. Smith revised it six times, the last being in 1790. Smith became so well-known after the publication of this book that many wealthy students left their schools in other countries to enroll at Glasgow to study under Smith. The TMS won him high praise from Hume, Burke and Kant. Smith’s system was seen as a giant step forward in moral philosophy. Adam Smith’s legacy was tied to the Scottish Enlightenment, and the French and American Enlightenments.
Adam Smith’s TMS created a bedrock for his moral and ethical structure. Smith’s work is a promulgation of the great themes of the Enlightenment. His work on the TMS puts forward ideas about freeing us from war and faction, repression and especially religious institutions. His moral philosophy was very explicit about the correct attitudes in human behavior; it took to task what was seen as the prejudicial and dogmatic assumptions about culture, social hierarchy, freedom and religion. He contended that modern liberty requires moral virtue, not wisdom. He personally saw the TMS as a doctrine of moral emotions, not philosophical reason. Smith based his morality and social harmony on “sentiments” (also termed passions). He saw a decent ethical life as based on passions, which displaced the theoretical pursuits of philosophy as a basis for human life. This pragmatism based on sentiments (what psychoanalysis refers to as instinct) moves at least a portion of his work in the direction of what later evolved into psychology and psychoanalysis.
One of the chapters in this book focuses on The Wealth of Nations (1776) (WN from this point on). Smith’s later work was a precursor to the modern academic discipline of economics, known as homo economicus. In this book, he laid the foundations of the concept that self-interested behavior in a competitive economy would lead to economic prosperity. The division of labor was seen as the basis for growth and prosperity. The book was an instant success, selling out of its first edition in six months. This book was the basis for Smith’s notoriety as the father of modern economics. One of our chapters will briefly focus on the WN, and we undertake an analysis of what motivated Smith’s work in this area.
In this current book, we do not go into the LJ (1978), however, we refer to it in several chapters of this book. The LJ contains two sets of lecture notes. They were taken from Smith’s lectures of the 1760s. It also contains an early draft of the WN. The lectures address his “theory of the rules by which civil government ought to be directed” (LJ, p. 5). According to Smith, the primary purpose of government was to preserve justice, which meant security from injury. He elaborated by saying an individual’s rights to his property, social relations, reputation and his person must be protected by the state.
The organization of our book is as follows. Chapter 2 is entitled “An intersubjective interpretation of sympathy”. This chapter introduces the interactive understandings that come from the branch of psychoanalytic study that speaks to the mutual interactions between people, and applies these understandings to Smith’s sympathetic interactions between the spectator (observer) and the agent (observed). This chapter gives a brief description of sympathy from the TMS and reviews the psychoanalytic literature on intersubjectivity. We then present an integration of sympathy and intersubjectivity. Sympathy that occurs between the agent and the spectator is through imagination. Even though the spectator owes his existence to real spectators of the society, he is internalized and imagined by the agent. The spectator, through imagination, puts himself in the agent’s situation, and feels something analogous to what the agent feels. The spectator compares his feelings with those of the agent. To have a concordance of sentiments, both the spectator and the agent work hard. Sympathy is the concordance of sentiments. In the psychoanalytic literature, intersubjectivity is associated with mutual influence, mutual recognition and shared meaning. We argue that the sympathetic process is intersubjective, since all the elements that are identified in the sympathetic process are also described and elaborated upon in the psychoanalytic literature. We also explain why we see sympathy as the forerunner of empathy, which is a crucial element of the intersubjective process. We argue that our perspective differs from the literature on this subject since we see sympathy as the forerunner of empathy.
Chapter 3 is entitled “Sympathy, empathy and empirical evidence from developmental psychology”. Sympathy in the TMS has both a cognitive and an affective dimension, as in empathy. As with sympathy, through empathy one imagines being in the other’s situation and experiences the other’s psychological states. In this chapter, we review the concept of empathy, including Freud’s usage of the term. We point out that Freud was familiar with Smith’s work. We argue that sympathy is a forerunner of the psychoanalytic and developmental term empathy. Smith’s theory to date has not been examined in the light of empirical literature related to empathy. The empirical literature suggests that empathy leads to moral (pro-social) behavior, and as such supports Smith’s theory. Specifically, the evidence shows that empathy leads to pro-social behaviors such as sharing, helping and cooperation. These behaviors are evidenced in the first year of life, and as children grow up they show: 1) the cognitive capacity to interpret states of others; b) the emotional capacity to experience, affectively, the states of others; and c) evidence of behavioral repertoire that facilitate attempts to alleviate the discomfort of others.
Chapter 4 is entitled “The impartial spectator, conscience and morality”. Here we describe Smith’s moral system that serves as the foundation for understanding the following chapters. The main focus of this chapter is the tension between self-command and the instincts (passions as Smith refers to them). This tension comes as the result of the impartial spectator evaluating the behavior or passions of the agent. The spectator’s impartiality is crucial for moral judgments. The spectator achieves this by imagining that he is also spectated. Conscience (internalized morality) is the result of cumulative interactions between the spectator and the agent. The agent judges himself as the spectator would, by dividing himself into two: the one part is the spectator and the other is the agent. Morality is created through the dynamic interaction between the spectator and the agent, which replaces the power of the individual with the power of the community, brought about by the spectator and the agent seeking harmony with each other’s emotions. The self-command of the agent is necessary for the impartial spectator to go along with the agent’s passions. In the section entitled “of the influence and authority of conscience”, Smith states that the virtuous man has the “most perfect command of his original and selfish feelings”, which has the sympathetic feelings of others (TMS, p. 176). Self-command prospers most under difficult and challenging conditions. Morality is achieved through social coordination and self-command in the sympathetic process. The bedrock of morality for Smith is self-command over passions (instincts). However, we also argue conversely that instincts are more than a process to be devalued. Without instincts, there would be no need for self-command or morality, and instincts provide the foundational energy to drive the dynamic process.
“The role of the Deity in Smith’s moral system” is the title of Chapter 5. This descriptive chapter underscores that for Smith, the Deity provides the content of his moral philosophy. He sees the invisible hand of the Deity as the designer and guide of the universe. Morals are an extension of the Deity’s design. Impartial spectators who act as the human vicegerents of the Deity implement morality. The sympathetic process is the mechanism through which the design of the Deity is transmitted. Smith sees cooperation with the Deity as acting morally, and Smith sees the Deity as benevolent and protective even through adversity.
Chapter 6 is entitled a “Known world: an analysis of defenses in Adam Smith’s The Theory of Moral Sentiments”. One of the essential elements for the human transition from an instinctually unreflective state to the conscious implementation of a moral structure is a psychological defense system. Defenses are necessary to restrain purely instinctual action. This leads us to analyze the psychological defense system that Adam Smith employs in TMS. The defense structure creates a knowable world, which we have termed as the “known world”. By a known world, we mean a world in which consensual rules are implemented and followed by all people, creating a stable system. Thus, the known world is a system that reifies defenses at a social level and allows the implementation of a moral structure. Smith’s primary defensive structure is composed of the rationalization of his positions, the moralization of the rightness of his position and the intellectualization of his positions. These are all methods that facilitate the restraint of instinctual affect and allow for morality. In addition, Smith carefully and exactingly displaces anger according to the values of his moral structure on to the “proper objects” of resentment. This type of displacement also requires both repression and suppression of affective impulses in order to accomplish displacement. All of these strategic defensive arrangements make possible the structure of his known world. It is this defensive known world that is conveyed through the intersubjective interactions that communicate the core of morality through the sympathetic/empathetic process. This system of defenses in the TMS, like any other defensive system, has both strengths and limitations. Its strengths facilitate the structure of the moral system that Smith promotes, and its limitations exclude creativity, change, dynamism and spontaneity.
In Chapter 7, entitled “Defenses and morality: Adam Smith, Sigmund Freud and contemporary psychoanalysis”, we show the development of a through line from the work of Adam Smith in his TMS on the impartial spectator, through Sigmund Freud’s work on the superego. The premise is that Smith’s work in the mid-18th century was a predecessor to Freud’s work in the early 20th century. While their work had a different primary focus, both Smith and Freud relied on defenses as an integral part in the imposition of any type of moral structure upon instinctual life. We discuss the similarities and differences between Smith’s and Freud’s approaches. In addition, we discuss how defenses are an integral part in the internalization of a moral structure, and how one’s relationship to those defenses ultimately plays a very important role in ongoing individual development. We also look at how the evolving attitudes towards defenses in psychoanalytic theory have made great strides relative to Smith’s reliance on a more religious attitude, in humanizing the more sadistic qualities of the superego (impartial spectator). We also highlight the shift from a one-person psychology to a two-person psychology in defenses and moral development as articulated in the contemporary psychoanalytic literature.
Chapter 8 is entitled “An evolutionary psychological and adaptive defenses view of relations between markets and morality”. This chapter examines the reciprocal effect of markets on morality and morality on markets, looking at Smith’s original ideas in this area, and from the perspective of evolutionary psychology and adaptive defenses. Growing out of evolutionary psychology are the pivotal capacities for delayed gratification and trust in the complex human interactions that make possible the reciprocity between markets and morality. Delayed gratification and the development of trust evolve from the integration of adaptive defenses in relation to the impulsive demands of immediate instinctual needs. Here we examine the reciprocal and intersubjective nature of these interactions with a particular emphasis on the adaptive defenses that facilitate the means for individuals to adopt morality. We apply this set of understandings to Smith’s work and show the relationship between markets and morality that are in his writing along with the significant defensive processes that are necessary to accomplish the application of such a theory. Delayed gratification, which is a moral virtue according to Smith, leads to savings furthering growth. Increased trust among participants leads to increased trade in the market place. Due to the realized benefits of trust in the market place, cooperative morality is enhanced.
“Adam Smith and dependency” is the title of Chapter 9. The focus of this chapter is on the work and life of Adam Smith. Adam Smith is widely recognized as the father and founder of contemporary economics. A latent content analysis is applied to his seminal text in economics, WN. The results reveal that Smith considers dependence on others a problem and sees the solution to this problem in impersonalized interdependence. In addition, his views on social dependency and personal dependency reflected in his LJ and the TMS are analyzed. This analysis suggests a central tension between dependence and independence in Smith’s writings. The personal dependency patterns he exhibited in his life, through a reading of his biographies, which also suggest a tension between dependence and independence in his life, are also identified. Benefitting from psychoanalytic literature, it is proposed that developing the ideas in the WN was part of Smith’s creative solution to this tension. In particular, his solution to one individual’s dependence on another was through a system of impersonalized interdependence. In other words, it is argued that Smith defended against his personal dependence through his economic theorizing.
The title of Chapter 10 is “On friendship”. Smith’s notion of friendship can be conceptualized from two different perspectives. First, there is evidence in his writings that would characterize his attitude towards friendship as being based on its usefulness in gaining sympathy. This perspective views friendship as prescriptive and is based on an evaluative thought process to gain the approval of the other. This position is not based on the need for intimate interaction or feeling states, rather it is objectified to alleviate the potential of personal dread. Second, Smith observes that where love and friendship motivate people, society flourishes and is happy. In our reading, the bulk of his arguments in this area show a stronger emphasis on the first. There is also a debate about whether Smith saw commercial societies as conducive to “warm” friendships or leading to “cool” interactions. Our view is that commercial societies are not conducive to warm friendships but led to cool relations. This is consistent with our argument in Chapter 9 that for Smith interactions among individuals took the form of impersonalized interdependencies. We then examine friendship in Smith’s writing from a psychoanalytic perspective. Smith speaks of friendship and love from an idealized point of view. On the one hand, he has an optimistic perspective on friendships. Yet within his structure there is no real accommodation of the difficulties that come from human interactions. His idealization takes the form of seeing interactions from a good/bad, inclusive/exclusive and right/wrong point of view. Those who live up to these ideals are included and those who do not are excluded. For example, Smith does not include the interactions of love, guilt and reparation, which are ongoing dynamics in human relationships. Smith does not have a mechanism to accommodate the positive and negative feelings that exist within friendship. In addition, mature dependence is not present in Smith’s approach because there are no accommodations for differences. Mature dependence implies dependence of some sort, which Smith defended against in his writings.
“A Jungian interpretation of the place of women in Smith’s works” is the title of Chapter 11. This chapter brings in the work of C. G. Jung as we take up the issues of instinct, women and self-command in Smith’s work. In the TMS, the WN and the LJ, Smith’s attitude towards women is at best ambivalent and at times devaluing of women. His ambivalence reflects his ambivalence between the instinctual nature that all human beings are born with that he mostly identified with women, and self-command that he sees as the primary domain of men. Smith characterizes this as the difference between humanity, which women have the capacity for because it comes from the instinct, and generosity, which requires the development of “self-command” and is gene...
