Adam Smith on Money and the Pursuit of Happiness
"Happiness requires not that we obtain ever more but that we recognize when we have enough, so that we can turn our attention from mere idols to the things that really matter."
At the beginning of Part IV of his The Theory of Moral Sentiments, Adam Smith addresses an important matter to which Bernard Mandeville had drawn considerable attention. Mandeville had argued in his famous The Fable of the Bees or Private Vices, Publik Benefits that private vice spawns public virtue, and that if any human community were to adopt a strict code of virtue, the result would be economic catastrophe. If, for example, Americans kept their automobiles for as long as possible, complying scrupulously with recommended maintenance protocols, the demand for cars would decline precipitously, cutting into automotive stock prices and putting countless laborers out of work. Likewise, were Americans to stop paying attention to style and regard clothing in simply utilitarian terms, the consequences for the fashion industry would be devastating. Vices such as vanity and envy, which confuse our self-image with our self-worth and keep us keeping up with the Joneses, act as stimulants to make the economy hum, and only a heartless ascetic could will their extinction.
Yet, asks Smith, “How many people ruin themselves by laying out money on trinkets of frivolous utility?” How many well-off Americans opt for the full-sized Lexus LS sedan when a Toyota Corolla, available at a fraction of the price, would satisfy the need for transportation? How many prefer to buy hand-tailored designer fashions by Coco Chanel, Giorgio Armani, and Diane von Furstenberg, when off-the rack options from retailers such as Target, T.J. Maxx, and even Goodwill would suffice? Simply put, many of us spend far more than necessary to get what we need, sometimes expending vast sums of money on things we need not at all. The appeal of so-called luxury goods, lies not in mere utility, but in the opportunity they present to draw attention to ourselves and turn others green with envy. We assess our own stratum in life in relation to the strata of others, and so valuable is it to us to appear superior, or at least equal, that some of us will spend ourselves deeply into debt to do it.
Smith is merciless in poking fun at this avaricious tendency. It is not the utility of the purchases themselves, he says, but the aptness of the machines which are fitted to promote it. We stuff our pockets with little conveniences – the latest electronic gadget – and then “contrive new pockets, unknown in the clothes of other people, in order to carry a greater number.” We spend our off-hours visiting automotive showrooms or thumbing through fashion magazines, thereby stoking the flames of our cupidity. We literally load ourselves down with things we don’t need, attics and garages and even daily living quarters overflowing with baubles that wear us out from the weight of carrying them and the disorder they inevitably precipitate. Many of us are so captivated by the drama of consumption and self-presentation that we become possessed by our possessions.
Smith notes that illnesses and the weariness of old age, should we be so fortunate as to live so long, tend to erode the “pleasures of the vain and empty distinctions of greatness.” People who once knocked themselves out to earn a promotion and the higher salary that accompanies it, sweated long hours every day to get a new business venture off the ground, or brooked no obstacle on their path toward a coveted bonus, lose their appetites for such pursuits. Empirical economic data bear this out. In the earlier stages of life, people move up through career ladders and go into debt purchasing houses, automobiles, and the like. Later in life, when many have accumulated their greatest purchasing power, demand declines, perhaps because we have learned that money cannot buy happiness. Imagine the difficulty even the most irresistible timeshare salesman would encounter among the denizens of the oncology ward.
With illness and age, Smith writes, we learn to “curse ambition, vainly regretting the ease and indolence of youth, pleasures which are fled forever, and which we have foolishly sacrificed for what, when we have got it, can afford us no real satisfaction.” The key term here is real, as in real satisfaction. To be sure, people easing their new luxury automobile into the driveway may experience a thrill, just as people entering a ballroom displaying the latest couture may beam with pride, but such sensations pass quickly, in part because they reflect a false social- and self-consciousness. No matter what vehicle we arrive in or what fashion we adorn ourselves with, with time, we learn that we are still the same person, and such accoutrements do nothing to rescue us from the hollowness of ostentation. Only those completely devoid of self-reflection, the utterly damned, can indulge such misguided passions indefinitely.
Smith writes that disease and age offer their own corrective to what we assume to be “wanting to our happiness.” Viewed from the vantage point of mortality, which is to say something approaching eternity, we realize that “power and riches” are really what they appear to be; namely, “enormous and operose machines contrived to produce a few trifling conveniences to the body, consisting of springs the most nice and delicate, which must be kept in order with the most anxious attention, and which, in spite of all our care, are ready every moment to burst into pieces, and to crush in their ruins the unfortunate possessor.” Even the most expensive automobiles can throw a rod or simply run out of gas. A seam can tear in even the most voguish of dresses. And even when no disaster supervenes, we can become so preoccupied with maintaining appearances that we forget to be and to live.
The key is the imagination, which though in times of pain and sorrow seems to be “cooped up within our own persons, in times of ease and prosperity expands itself to everything around us.” We gorge ourselves on the lifestyles of the rich and famous, “charmed by the beauty of that accommodation which reigns in the palaces and economy of the great,” pouring gasoline on the bonfire of our own discontent and avarice. Everything seems so “adapted to promote their ease, to prevent their wants, to gratify their wishes, and to amuse and entertain their most frivolous desires.” By comparison, many of us find our own lives contemptible and trifling, and we are inclined instead to muse obsessively about how much happier we would be if only we enjoyed the same high purchasing power. If only I had that net worth, that house, that car, that dress, that body, then I would surely be the most content and fulfilled version of myself. We make the perennial human error of supposing that happiness requires nothing more than getting what we want.
Smith reminds us that our attitude toward acquisition offers deep insight into our own maturity and wisdom. Those among us who dream above all of money and the things money can buy are stuck in a benighted and stunted stage of development. We think that worldly wealth and greatness are something grand, beautiful, and noble, and that they are “well worth all the toil and anxiety which we are so apt to bestow upon them.” Smith does not deny at least part of Mandeville’s central point – that this deception that nature has imposed upon us “rouses and keeps in continual motion the industry of mankind.” Yet as a counsel of mature wisdom, it leaves a great deal to be desired. Everything that we have can be lost or taken away, and even if we could with certainty secure it, it would nevertheless touch only the outer person, the superficial part of our nature. Our station in life is not and should not be a matter of mere indifference, but neither should it occupy our whole field of view.
When it comes to peace of mind, Smith writes, “All the different ranks of life are nearly upon a level, and the beggar, who suns himself by the side of the highway, possesses that security which kings are fighting for.” To be rich, powerful, or famous does no good for a bubblehead, and people without chests can know no nobility, no matter how opulent their palaces and the possessions they contain. We can be beautiful on the outside but empty and even ugly on the inside. It makes no sense to go on acquiring more, if doing so merely augments our sense of inadequacy and desperation to strive for even more. Smith may not be a rich man, but he is mature in wisdom, and he recognizes that peace of mind, far from fungible, is not even within reach of those who think first of money. Happiness requires not that we obtain ever more but that we recognize when we have enough, so that we can turn our attention from mere idols to the things that really matter.
Want more?
Jimena Hurtado's Smith Snark on Bernard Mandeville
Jeremy Lott and Jason Meadows' Adam Smith Comics: Trinkets of Frivolous Utility
Erik Matson's Perspectives from Smith on Wealth and Happiness
Yet, asks Smith, “How many people ruin themselves by laying out money on trinkets of frivolous utility?” How many well-off Americans opt for the full-sized Lexus LS sedan when a Toyota Corolla, available at a fraction of the price, would satisfy the need for transportation? How many prefer to buy hand-tailored designer fashions by Coco Chanel, Giorgio Armani, and Diane von Furstenberg, when off-the rack options from retailers such as Target, T.J. Maxx, and even Goodwill would suffice? Simply put, many of us spend far more than necessary to get what we need, sometimes expending vast sums of money on things we need not at all. The appeal of so-called luxury goods, lies not in mere utility, but in the opportunity they present to draw attention to ourselves and turn others green with envy. We assess our own stratum in life in relation to the strata of others, and so valuable is it to us to appear superior, or at least equal, that some of us will spend ourselves deeply into debt to do it.
Smith is merciless in poking fun at this avaricious tendency. It is not the utility of the purchases themselves, he says, but the aptness of the machines which are fitted to promote it. We stuff our pockets with little conveniences – the latest electronic gadget – and then “contrive new pockets, unknown in the clothes of other people, in order to carry a greater number.” We spend our off-hours visiting automotive showrooms or thumbing through fashion magazines, thereby stoking the flames of our cupidity. We literally load ourselves down with things we don’t need, attics and garages and even daily living quarters overflowing with baubles that wear us out from the weight of carrying them and the disorder they inevitably precipitate. Many of us are so captivated by the drama of consumption and self-presentation that we become possessed by our possessions.
Smith notes that illnesses and the weariness of old age, should we be so fortunate as to live so long, tend to erode the “pleasures of the vain and empty distinctions of greatness.” People who once knocked themselves out to earn a promotion and the higher salary that accompanies it, sweated long hours every day to get a new business venture off the ground, or brooked no obstacle on their path toward a coveted bonus, lose their appetites for such pursuits. Empirical economic data bear this out. In the earlier stages of life, people move up through career ladders and go into debt purchasing houses, automobiles, and the like. Later in life, when many have accumulated their greatest purchasing power, demand declines, perhaps because we have learned that money cannot buy happiness. Imagine the difficulty even the most irresistible timeshare salesman would encounter among the denizens of the oncology ward.
With illness and age, Smith writes, we learn to “curse ambition, vainly regretting the ease and indolence of youth, pleasures which are fled forever, and which we have foolishly sacrificed for what, when we have got it, can afford us no real satisfaction.” The key term here is real, as in real satisfaction. To be sure, people easing their new luxury automobile into the driveway may experience a thrill, just as people entering a ballroom displaying the latest couture may beam with pride, but such sensations pass quickly, in part because they reflect a false social- and self-consciousness. No matter what vehicle we arrive in or what fashion we adorn ourselves with, with time, we learn that we are still the same person, and such accoutrements do nothing to rescue us from the hollowness of ostentation. Only those completely devoid of self-reflection, the utterly damned, can indulge such misguided passions indefinitely.
Smith writes that disease and age offer their own corrective to what we assume to be “wanting to our happiness.” Viewed from the vantage point of mortality, which is to say something approaching eternity, we realize that “power and riches” are really what they appear to be; namely, “enormous and operose machines contrived to produce a few trifling conveniences to the body, consisting of springs the most nice and delicate, which must be kept in order with the most anxious attention, and which, in spite of all our care, are ready every moment to burst into pieces, and to crush in their ruins the unfortunate possessor.” Even the most expensive automobiles can throw a rod or simply run out of gas. A seam can tear in even the most voguish of dresses. And even when no disaster supervenes, we can become so preoccupied with maintaining appearances that we forget to be and to live.
The key is the imagination, which though in times of pain and sorrow seems to be “cooped up within our own persons, in times of ease and prosperity expands itself to everything around us.” We gorge ourselves on the lifestyles of the rich and famous, “charmed by the beauty of that accommodation which reigns in the palaces and economy of the great,” pouring gasoline on the bonfire of our own discontent and avarice. Everything seems so “adapted to promote their ease, to prevent their wants, to gratify their wishes, and to amuse and entertain their most frivolous desires.” By comparison, many of us find our own lives contemptible and trifling, and we are inclined instead to muse obsessively about how much happier we would be if only we enjoyed the same high purchasing power. If only I had that net worth, that house, that car, that dress, that body, then I would surely be the most content and fulfilled version of myself. We make the perennial human error of supposing that happiness requires nothing more than getting what we want.
Smith reminds us that our attitude toward acquisition offers deep insight into our own maturity and wisdom. Those among us who dream above all of money and the things money can buy are stuck in a benighted and stunted stage of development. We think that worldly wealth and greatness are something grand, beautiful, and noble, and that they are “well worth all the toil and anxiety which we are so apt to bestow upon them.” Smith does not deny at least part of Mandeville’s central point – that this deception that nature has imposed upon us “rouses and keeps in continual motion the industry of mankind.” Yet as a counsel of mature wisdom, it leaves a great deal to be desired. Everything that we have can be lost or taken away, and even if we could with certainty secure it, it would nevertheless touch only the outer person, the superficial part of our nature. Our station in life is not and should not be a matter of mere indifference, but neither should it occupy our whole field of view.
When it comes to peace of mind, Smith writes, “All the different ranks of life are nearly upon a level, and the beggar, who suns himself by the side of the highway, possesses that security which kings are fighting for.” To be rich, powerful, or famous does no good for a bubblehead, and people without chests can know no nobility, no matter how opulent their palaces and the possessions they contain. We can be beautiful on the outside but empty and even ugly on the inside. It makes no sense to go on acquiring more, if doing so merely augments our sense of inadequacy and desperation to strive for even more. Smith may not be a rich man, but he is mature in wisdom, and he recognizes that peace of mind, far from fungible, is not even within reach of those who think first of money. Happiness requires not that we obtain ever more but that we recognize when we have enough, so that we can turn our attention from mere idols to the things that really matter.
Want more?
Jimena Hurtado's Smith Snark on Bernard Mandeville
Jeremy Lott and Jason Meadows' Adam Smith Comics: Trinkets of Frivolous Utility
Erik Matson's Perspectives from Smith on Wealth and Happiness