In Theory of Moral SentimentsAdam Smith explains that we want to develop a “sympathy of feeling.” We want people to agree with our opinions, and we want to agree with their opinions. Smith began by expanding on this idea—that we are always looking for ways to cooperate—to The Theory of Moral Sentiments, before he developed his comprehensive theory of commercial society in An Inquiry into the Nature and Causes of the Wealth of Nations. The implications were striking: the complex division of labor and division of knowledge, and the kind of prosperity we see today.
That’s what all bid and ask in the market is: a request for cooperation in sympathy with the other person. It may be rejected outright by someone who doesn’t share the same feelings, but every opportunity to exchange is a sacred opportunity to work together with someone for good.
Of course, not all people have to agree, and many may not be on the receiving end. The beauty of the commercial community is that it doesn’t really matter. The only ones who really need to agree are trading partners. While there is clearly a difference between power and manipulation, it is clear that an agreed-upon, voluntarily negotiated negotiation is an attempt to establish emotional empathy and a shared vision of a better world.
Bloggers and economists Tyler Cowen and Alex Tabarrok coined the title for their blog The Marginal Revolution with the tag line “small steps to a better world.” And that’s exactly what every exchange is: it’s a small step towards a better world as measured by the people who enter the exchange. When Mary trades oranges for apples to Burt, it is because they share a vision of a better world: where Mary has more oranges and fewer apples while Burt has more apples and fewer oranges. It’s a small step, but a step nonetheless. In a country of 8.5 billion people, it means billions of billions of small steps towards a better world through empathy, feelings, and shared ideas.
Raymond Tallis described the developing world as the product of “billion rational handshakes,” where each handshake only happens because two people have a vision for a better world. Each deal is a bet on a better future and a move to a place where one can make an even better bet on a better world.
Not all handshakes of understanding mean that people grow, prosper, and live well. But we must take the chaff and the wheat. We must embrace both the good and the bad. Importantly, disrupting this mental connection between people poses a serious risk: it may hinder their ability to realize a shared vision of a better world.
This does not mean that government is the answer. All political agreements reflect a common sense about what actions should be imposed on others. It lacks dignity and fails to respect the freedom and dignity of those whose choices we may not accept. Yet agreements are often made in the name of addressing issues that we may not fully understand. As an economist, instead of dismissing people’s actions as “well, that’s stupid,” we must ask, “what problem does this solve? What purpose does this serve?” Even if we don’t agree with their version of a better world, we should question our tendency to intervene. The next time you’re in the grocery store, think about this idea: every product on the shelves represents an effort to foster empathy and a shared vision of a better world. It may not be compatible with it yours an idea, but it is important to the person—and that is important.
