Adam smith is probably the second best thing to come out of scotland. The first isnt golf. But you man know about his famous book, the wealth of nations. You may know he was a free trader and he may have heard of the invisible hand. What i want to talk about tonight is smiths other boat, the theory of moral sentiments i want to give you an insight into his economics and apply them to modern life. What i want to do tonight is give you an idea of what adam smith can teach us about ourselves and the world around us. I want to start with the story, i was in london last week, i think it was last week. It was this year for sure. It was a whirl wind trip. Had a great time. Never been in london before. I gave a talk at a place called the will society of arts. The Royal Society of arts is very old. The use to be called the Royal Society for encouraging manufacturing, the arts and commerce. Now is called the Royal Society of arts and it is to create creativity and ideas and it is a wonderful place. I was giving a talk there and before i gave my talk, i went to the side and they put up the bring, and there were cookies in drinks and often the corner is the only interesting thing in the room and the corner is an enormous green leather chair. It is is this wide with beautiful wooden arms, this gorgeous carving around the top end it says boat president ial chair was designed by william chambers. I looked him up. He is a famous architect of his day. He designed somerset house, ridiculously enormous building a few blocks from where i was talking and he designed this chair. The president s share, 1759. I got excited for two reasons. 1759 was the first years that the theory of will sentiments the theory of moral sentiments was published and adam smith was a member of the Royal Society of arts. It was possible that adam smith had sat in this very share in 1759 when his book came out, the book i was writing about and i was excited. What could be fun to sit in this chair, the same chair, my bottom could sit in the same place adam smiths bottom has also been. But there was a sign that said do not sit in the chair. But there was no one in the room. So what did i do . I want to suggest two things. First, that adam smith has a deep understanding of why i wanted to sit in that chair which is fundamentally a little peculiar and whether i sat in the chair or not. And think about whether you would have set in the chair or i am an economist, perhaps i sat in the chair or maybe i didnt. Understand, the psychology of this on want to tell a story from my book and c smiths insights into celebrity. You think in 1750 there couldnt be that much celebrity, a cabletv, no talk shows, no magazines but this smith was aware how compulsively and obsessively interested we are in famous people, and from modern times, what helps at smiths in sight, ted williams, perhaps the greatest baseball player of all time have very distinctive car. He had a Cadillac Coupe they ville, creamcolored Cadillac Coupe they ville and he had a buddy an everyday guy, great for him to have somebody who wasnt always fawning on demand interested in him and just was his buddy. His name was Jimmy Carroll and he used to drive ted williams around in the car and when ted was out of town sometimes jimmy would borrow the car so one night jimmy had 8 and he asked to williams i have got a date, can i take your car . So he takes the car, picks up the date, goes to the restaurant, tools and the parking lot and a police car pulls up behind him and says are you a baseball player . And he says no, why . Because you are driving to williamss caught. The police knew ted williamss car, probably speeding all the time, probably never got a ticket but his car was very well known by the boston police. Finally she carol convinces him he didnt steal the car the cop says no problem and he says what you are in a restaurant would it be ok if i sat in the car . He says that is no problem. So he comes out of the restaurant and hour later, not the cop is in the car with five of his friends. A la just sitting in the car like me, wanting to sit it doesnt really it is embarrassing. What is left will . What is the excitement of sitting in to williamss car . If he could be in the car, but he is not in the car. Adam smith was not in the chair. What is the appeal . What smith says, celebrity draws us, we are so attractive demand of rain and distinction is observed by all the world. Everyone is eager to look at him and can see by sympathies that joy and exultation which circumstances naturally in spite him, his actions are the object of the public care so we live vicariously through famous people. We imagine what their lives must be like and want to be a part of it and he says it helps us understand how sad we get when famous people died. He talks about the emotional investment in make in people who dont know us, cant csn yet we have this connection to them. Calls them the great. By the agreements famous people. When we consider the condition of the great in those elusive colors meaning delusionary in which the imagination is apt to paint it, it seems to be almost the abstract idea of perfect and happy state. We have this imagining they have this perfect life. The very state which in all of our waking dreams and vital referees we have sketched out to ourselves as the final object of all our desires so we see this perfect life, that could have been me, that is what i was hoping for. We feel peculiar sympathy with the satisfaction of those who are in it, we favor all their inclinations and for all their wishes, what pity, we think that anything should spoil and corrupt so agreeable a situation and that, smith says, is why it is so hard for us to see them die, we could even wish them immortal and it seems hard to us that death should last an end to such perfect enjoyment, it is cool, we think, in nature to compels them from their exalted stations to that humble but hospitable home which he has provided for all her children, meaning death. Everything that hurts them emotional connection we have to their misfortunes, there tragedies is 10 times greater than we have for other people we have this ridiculous, irrational obsession with greatness and we have it with people who are rich, people who are famous, people like powerful. When kings die or kings are assassinated the parttime, when politicians are killed we had an emotional reaction far out of line with what you would think would be relative to people we know in our lives. So smith understood that in 1759, people listen to famous people even if they didnt have much to say and even now Kim Kardashian is breaking the internet as i speak. So what i would say is an action right now while i am giving this talk if Angelina Jolie and brad pitt wanted in the back of the hall because they also always wanted to know about smith and their in back or to the side taking notes with hal long would it be before the lecture was totally disrupted. They would be much more interesting than anything. I would be more interested in them than anything i would have to say. We would be obsessed with wanting to see what they were doing, what with a wearing so of course i wanted to sit in the chair. One might suggest based on the caricature people have about adams smith, the caricature of smith is he was about greed, naked selfinterest, he believe greed is good. And yet theres nothing about that in the the wealth of nations and the opposite is true in the theory of moral sentiments. He counsels constantly against of being overly attracted to the pursuit of money, fame and power and the evils, the corruption of ambition. Many economists would say sit in the chair because the costs are zero, no one will see you, the benefits of the thrill you get from sitting in the chair. Smith, i dont think would have agreed. He did nazi selfishness as a virtue. He cites human beings as self interested, yes and gold wealth of nations is about our interactions across these, dealing commercially with strangers. He was interested in how trade led to specialization which lead to prosperity and allowed some nations to the wealthy and some nations not to be the theory of moral sentiments he is interested in family and friends and people around us. Smiths perspective in this single sentence captors in many ways the essence of his ideas of what makes us take. Smith says man naturally desire is not only to be loved but to be lovely. And not the everyday meaning of those words the we have. And smiths time loved etna and honor, respected, admired, worthy of attention. People. Attention to you. Lovely meaning worthy of being honored, respected and admired, the increase were the. Deep down what we really care about, what creates true happiness is that we are respected and honored baez those around us and we honor that truly and honestly. It is a very deep fought when you apply it to yourself and other people as well. You start to see how a lot of times the way we interact with people, influenced by that very natural human desire to be honored, respected, loved and praised. We also want to be lovely. If everyone said in a the chair the chair would not be there. Is selfish and wrong to sit in the chair. No one will see me, i will get away with that. It is the wrong thing to do. If i want to be lovely, it is not just what other people see me do. If i want to be loved, be truly a good person, i have a desire even when no one was watching, i am watching and i know whether i was honorable or not so i didnt sit in that chair and if i did i wouldnt tell you because i want to be loved, right . I wish i had the video tape but i didnt sit in the chair. What smith is saying about being loved and lovely, he is trying to give us the origins of our conscience. He said something very radical for 1759. He is saying your conscience doesnt come from religion. Your conscience doesnt come from your parents, your upbringing. Your conscience comes from the desire to be pleasing and honorable to the people around you and you learn about what is honorable and good and decent by watching what other people do when other people do things good and bad and when you see somebody do something good that gets honored admired you make a mental nose and when you see something people disapprove of you take and mental note, not literally, you are not keeping it though in our world we often do take notes but we attacking about the subtle signals we send to each other through our myriad daily interactions, we learn about what is appropriate and what is not appropriate. Then he says something very profound. Says there are two ways to be loved. We all have this insiders, he says. Men naturally desires not only to be loved but to be loved the. We want deep down, hard wired, people to approve of us and our two ways to get their approval. The first is to be rich, famous and powerful. We know that works, right . We know that Kim Kardashian is breaking the internet, she is powerful i guess. She is rich. Politicians, wealthy people, actresses, actors, athletes, cinders, we are drawn to them and they lead a very peculiar life. Smith talks about this a lot. I talk about it in my book. The education that it you become accustomed to when you are famous. I told the story of Marilyn Monroe coming back from korea. She told her husband joe dimaggio it was unbelievable, you couldnt the days you cant imagine the crowds reactions, yes i can. I can. You have that everyday and then it goes away. You dont have it anymore and what is that like . What is it like for the politician who is dumped or whose term ends . Smith has extraordinary examples of a king captured by the romans and led through the streets it is miserable, wire they miserable . He has been captured by humane people. They are not going to torture or kill him. He is not going to be shot. It is the equivalent of house arrest. His kids will grow up fine, people have money, you get to eat well and have a nice recovery is head. The answer is no one is going to fun of him anymore. No one will be setting up to him and trying to get favors out of him. His life is awful. I recently heard a story of a rabbi who was sent to the gulag during the postworld war ii era, the worst times of the blood and if you havent read the book, read it as a thankyou note for the courage it took to write that book, it is three volumes, kind of long. If you dont want to read that, read the gulag. It is fantastic. This is a horrible thing where they take people, make them work hard and dont make them eat much and they dont have good clothes, it is of land he ten year sentence was usually a ten said death sentence. Often a 10 year sentence was a death sentence so he is talking to this guy and this guy says you are so happy. Why are you happy . This is awful . We have no food, we addressed in rags and we were called a, he said before, my job was to get people close to god. In the gulag my job is to get people close to god. I have the same job i had before. You were a banker. You were important. You had money and now you are a prisoner and you have nothing and you are miserable because you lost the things that gave you your sense of identity and your sense of pride which was money, which was people paying attention to you and now no one pays attention to him. His life is radically changed. Smith is saying we want, we are drawn to money, is a great thing, the worlds greatest economist complaining about money because we are drawn to many, fish and and power but ultimately it wont make as much happier than anything else and the pursuit of it will destroy s. It is extremely destructive. There is a better way to become loved, to be wise and virtuous and to be virtuous, to be lovely, a better way to be loved is to be lovely which is to be wise and virtuous and to be lovely smith says it is a two step process. The first is to be proper, act with propriety, do what people expect of you and the huge part of it is about propriety, something we dont talk about much. We kind of make fun of it. What he means is being stiff for an interesting or conformist, he means that in the good sense of the word meaning doing what people expect so that if you have a tragedy or success you know how to interact with people differently depending how close they are to you or not. An amazing thing he says. If you have a Great Success you are better off keeping it mostly to yourself. The man who by some sudden revolution of fortune is lifted up all at once into a condition of light greatly above what he formerly lived in, may be assured that the congratulations of his best friends are not all of them perfectly sincere. Gore vidal said it more bluntly. Every time a friend succeeds i die a little. If you have a big success and you share it with people they are going to pull back. If you have a small success joy is a nice emotion. A small success people will be happy for you. You can share it and they will be happy with you, they can empathize with your success. Agree tragedy, even a stranger can empathize with you. Lose a loved one which happens all the time in 1759, if you lose a loved one it is a stranger can empathize with you, not as well as a person who is close to you but the person who suffered the tragedy softens his emotions because he knows the stranger can fully empathize. The stranger is trying to get in closer and they get close but they cant create a perfect match. This is almost a dance or harmony or musical metaphor, we are constantly interacting with people around us trying to understand what theyre going through and we ourselves know is that the people around us cant understand what were going to and how we match and do that is what smith is talking about and is very beautiful but the real goal is virtue and smith has three big virtues and none of them agreed. Is virtues are prudence, justice and beneficence, take care of yourself, take care of your body, take care of your financial situation, dont be reckless, justice, dont hurt other people, dont steal, dont rob, help other people when you can, do the best you can. That is smiths world view in a nutshell, we want to be loved and lovely, we have a full to be loved through these unhealthy ways, many, the and power and were better off going is quieter path, we will get less acclaimed but it will be better for us and more honorable to be lovely, to be virtuous, to the proper. That is smiths advice. Smith is not a full. He understands that we have a terrible time with self deception so he knows that not only do we want to be lovely, if we are not lovely we at least once to think we are and that is a terrible problem. Misunderstand and writes about it very eloquently so is very easy for us to notice falls in others, not so easy to notice our own fault. Smith says an amazing line, he is a bold surgeon, as they say, whose hand does not tremble when he performs an operation upon his own person. Think about that. We can diagnose and operate on people around us, on ourselves not so good. We are not so good at seeing ourselves as we truly are. Smith says we are very uneasy about what he calls mysterious veil of self delusion. We cover our acts with but it is salt solution. We cover our deformities, moral deformities from the people around us because we dont want to be seen as bad people but we cover them from ourselves. This deception, this self deception of our own flaws is responsible for half the disorders of the life and i suggest maybe that is an underestimate. If we could only see ourselves as others see us we would have no choice but to reform our behavior and be different people. A rather remarkable claim. Smith gives us a way to see ourselves if we choose. He invokes what he calls the impartial spectator. A person we imagine watching us who is impartial, doesnt have a stake, isnt on our side, isnt against us but is judging us and when we are in some moments of a crucial moral decision or even just daily interaction when someone says help me out, do me a favor, step out of ourselves and ask ourselves what would an impartial spectator say when observing our classes and that impartial spectator, we populate, we give life to is that idea by watching the act will spectators whod judge us, approve or disapprove of our behavior. This marvelous vision of this network of connections that we share with each other is that we learn from that affect our behavior and we have a name for that, it is called culture. Our culture is where we get our judgments about what is right and proper and what is inappropriate and improper. Smith says in the heat of the moment selfinterest, which is often in conflict with the right thing, we will be seduced by our own selfinterest can do the wrong thing but nature has a way of reminding us, maybe i was a little bit selfish there when i skipped that funeral or didnt visit that friend in the hospital, when i worked on the project at work instead of going to help my kids with their homework. I want to close this by reading what smith says about our selfinterest. Recess though it may be true that every individual in his own breast naturally prefers himself to all mankind, true, right . We are the center of the universe, each of us, ea