Tuesday, November 19, 2013

Do realistic optimists have more successful lives?

I think realistic optimists probably do have more successful lives than optimists and pessimists, but unfortunately I cannot claim that I have a particularly strong basis for that view.

A couple of months ago I notice a story by Tia Ghose on Huffington Post reporting on research findings by Sophia Chou of the National Taiwan University. The research apparently suggests that realistic optimists – people who combine the positive outlook of optimists with the clear-eyed perspective of pessimists – get the best of both worlds. Their realism enables them to perform better at work because they don’t delude themselves that they can do well without working hard. Their optimism enables them to avoid getting bogged down by unhappiness.

I was particularly interested because of something I wrote on this blog a couple of years ago entitled: Why can’t we have a realistic basis for optimism? My consideration was prompted by a discussion by Martin Seligman of issues relating to possible circumstances where expectations may influence reality.

After reading the article by Tia Ghose, I decided to go looking for the relevant paper by Sophia Chou, which was presented at the American Psychological Association in Hawaii earlier this year. I haven’t been able to find a copy of the paper on the internet. I could write to the author and ask for a copy, but I don’t think I will bother. My qualifications are in economics, so I have reason to be pessimistic about my ability to judge the quality of the research behind these findings.

Sophia Chou’s research findings seem to me to make a lot of sense, but I guess a realistic optimist would wait for her paper to be published in a peer reviewed journal before getting excited about them.

Tuesday, November 12, 2013

Why seek out the statue of Adam Smith when visiting Edinburgh?

When I visited Britain in August I was pleased to see the image of Adam Smith on £20 notes. I was even more pleased to find a statue of Adam Smith in Edinburgh.
The statue, by Andrew Stoddart, stands in the Royal Mile, in High Street, next to St Giles Cathedral and opposite Edinburgh's City Chambers. It is not difficult to find.
Unfortunately, it seems that the birds are not treating Adam Smith with the respect he deserves, but I doubt that he would care.

I went looking for Adam Smith because he is the father of modern economics and because his views on the benefits of specialization and free trade have contributed to a vast improvement in living standards over much of the world over the last couple of centuries. But I suppose that is the kind of thing that might be said by anyone who views himself as a disciple of Adam Smith.

When asked to be more specific about Adam Smith’s contributions, people who are familiar with his writings tend to emphasize different things. One important contribution lies in fundamental thesis of Wealth of Nations that the extent to which people are able to enjoy ‘the necessaries and conveniences of life’ depends largely on labour productivity – ‘the productive powers of labour’. Economists debate whether Smith told the right story about productivity growth – perhaps he gave too much emphasis to capital accumulation, gains from specialization and scale economies, rather than to technological progress. I think the important point is that Smith understood and emphasized the importance of economic freedom in promoting productive use of resources (including good management) as well as an efficient allocation of resources among industries.

Mention of economic freedom brings me to the contribution that Smith made in pointing out the role of the ‘invisible hand’ of the market in translating the pursuits of individuals into desirable social outcomes. Smith noted:
‘It is not from the benevolence of the butcher, the brewer, or the baker, that we can expect our dinner, but from their regard to their own interest’.
Smith would not have approved of that oft-quoted sentence from Wealth of Nations being interpreted as implying that butchers, brewers, bakers and other people engaged in business activities pursue only selfish interests.  In The Theory of Moral Sentiments, Smith wrote:
‘How selfish soever man may be supposed, there are evidently some principles in his nature which interest him in the fortune of others and render their happiness necessary to him though he derives nothing from it except the pleasure of seeing it’.

Smith also made a major contribution in explaining that the visible hand of government is often far from benign. I particularly like a passage in The Theory of Moral Sentiments about the consequences of being governed by ‘the man of system’ – a political leader who is ‘apt to be very wise in his own conceit’. Smith suggests that the ‘man of system’ imagines that ‘he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess board’. He fails to consider that ‘in the great chess board of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might chuse to impress upon it’. Smith points out that when the visible hand of government is attempting to regulate the individual members of society, it is likely that ‘the game will go on miserably, and the society must be at all times in the highest degree of disorder’. (See: TMS, VI.ii.2.17).

I think Smith’s greatest contribution was in promoting the idea that a ‘system of natural liberty’ can establish itself ‘of its own accord’, when the role of government is confined to duties of ‘great importance’ that could not otherwise be performed. We should never lose sight of Smith’s vision of natural liberty:

‘Every man, as long as he does not violate the laws of justice, is left perfectly free to pursue his own interest in his own way, and to bring forth both his industry and capital into competition with those of any other man, or order of men. The sovereign is completely discharged from a duty [for which] no human wisdom or knowledge could ever be sufficient; the duty of superintending the industry of private people, and of directing it towards the employments most suitable to the interest of the society’. (See: WN, IV.ix.51).

Tuesday, November 5, 2013

Is there no nook of English ground secure from rash assault?

The question is from the first lines of a poem by William Wordsworth, written in 1841 in protest against plans for construction of the Kendall to Windermere railway in the Lakes District of England.

Wordsworth was not impressed by the view that the railway would place the beauty of the Lakes District within easier reach of these who would not otherwise have access to it. He described such arguments as: ‘Utilitarianism, serving as a mask for cupidity and gambling speculations’. Environmentalists sometimes advance similar arguments these days, but few are as rash as Wordsworth. The famous poet suggested that an appreciation of the beauty of romantic scenery was beyond the capability of ordinary people:
‘Rocks and mountains, torrents and widespread waters, and all those features of nature which go to the composition of such scenes as this part of England is distinguished for, cannot, in their finer relations, to the human mind be comprehended, even very imperfectly conceived, without processes of culture or opportunities of observation in some degree habitual’.

Our rash assault on Lake Windermere took place late in August, via the steam train from Haverthwaite to Lakeside.

It is hard to imagine that any reader of this blog would have difficulty in appreciating the beauty of Lake Windermere, but I will nevertheless add some of Wordsworth’s poetry below my photos.

Standing alone, as from a rampart’s edge,
I overlooked the bed of Windermere,
Like a vast river, stretching in the sun.
With exultation, at my feet I saw
Lake, islands, promontories, gleaming bays,
A universe of Nature’s fairest forms
Proudly revealed with instantaneous burst,
Magnificent, and beautiful, and gay.

(William Wordsworth, The Prelude Book IV)

After our cruise on Lake Windermere we visited Grasmere.

Rest in peace, William Wordsworth. I hope our visit did not disturb you too much. We were only in your beautiful Lakes District for one day. 
John Stuart Mill, one of the most famous advocates of utilitarianism, walked all over your Lakes District for the best part of a month in July-August 1831 and even spent about 4 days walking and talking with you.

After visiting Wordsworth, Mill told a good friend, John Sterling:
 ‘all my differences with him [Wordsworth], or any other philosophic Tory, would be differences of matter-of-fact or detail, while my differences with the radicals and utilitarians are differences of principle’. (See: Richard Reeves, John Stuart Mill, 2007, p 74.)

The best explanation of Mill’s views at that time seems to be that he was somewhat confused after setting out to expose himself to a variety of different views opposed to radical utilitarianism - the secular religion of his youth. Mill did this following a mental crisis which he attributed to realization that even if all his (radical utilitarian) objectives were realized, he would not be filled with ‘great joy and happiness’. In addition to the views of Wordsworth, Mill became strongly influenced at that time by French secular messiahs, Saint-Simon and Auguste Compte. (Mill’s involvement in that brand of secular religion has been examined by Linda Reader in her book, John Stuart Mill and the Religion of Humanity, 2002.)

Mill embraced the poetry of Wordsworth because it helped him to achieve a more tranquil mental state. I expect that vast numbers of people have been similarly helped by the imagery of the Lakes District conveyed by Wordsworth’s poetry.