Adam Smith's Warning About Wealth, Fame, and Status (with Ross Levine)

- Welcome to Econ Talk Conversations for the Curious,

“part of the Library of Economics and Liberty.”

I'm your host, Russ Roberts of Shalom College in Jerusalem and Stanford University's Hoover Institution. Go to econtalk.org where you can subscribe, comment on this episode and find links down the information related to today's conversation.

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- Today is March 10th, 2026 and my guest is economist Russ Levine, the Booth Derbis family Edward Lissier, senior fellow at the Hoover Institution. And co-director of Hoover's financial regulation working group. Prior to joining Hoover, he was a faculty member

at the University of California at Berkeley's high school of business, Russ, welcome to econtalk. Oh, it's great to be here, Russ. Our topic for today is Adam Smith.

“Today is March 10th, yesterday, March 9th was the 250th”

anniversary of the publication of the wealth of nations. And Russ, you decided to honor this anniversary in an unusual way, describe the project which you call from the hand of Adam Smith. So I decided that it was 250th anniversary

of the Declaration of Independence and more importantly for an economist, the publication of the wealth of nations. And so I was asked to write something about the U.S. independence.

And I proposed that I write a monthly letter from Adam Smith to America in 2026. And so the purpose of the letters is to be very true to Smith, but written in a way that is easy for somebody to read when they're waiting

in online. And as you know, very well from your own writings,

“Smith is oftentimes invoked and simplified”

and caricatured, but he's such a complex, insightful, scholar, psychologist, and political scientist that I thought he would have a lot to offer to many of us today. So, and I love this project. You know, I tried to do something similar

with my book, How Adam Smith can change her wife. But these are shorter and very readable. And you can find them, we'll link to them, but you can find them at, it's called Freedom Frequency, which is a Hoover channel on Substack.

And what we're going to do is talk about the first two letters.

So the first one begins this way and this will give listeners the flavor of the project. My dear friends, I look upon your age with admiration and astonishment. You enjoy conveniences and comforts

that the barons and princes of my time could not have imagined. And yet, you track your sleep as if peace could be graphed. Chase productivity as if rest were a moral failing and wake to voices urging you to optimize every hour

and maximize every potential. It's seldom paused to ask why. So I want to start with that, and by the way, what's nice about this writing you're writing is that there are words that are your own

and I would say I submit the in style. Like I just read. But you also try to quote Smith directly verbatim as much as possible. And that is a stick that can be annoying,

but it's not in your case. So I want to compliment you. It's very, very nicely done. So why would Smith, would Smith asking here, what is he saying to a modern from his perspective

of the 18th century? What's he asking us? So the way I understood it and understand it is he's asking, what are you doing? What motivates you?

Why do you work so hard? And he comes back to a theme that, oftentimes we work hard in order to be admired, in order to be held in a theme in order to receive praise. And he understands that this is a motivation

that has existed over time and across civilizations. But he's concerned about that as a motivation,

because he ultimately views it as leading to an emptiness

And I thought that for today and certainly in the US, that people work extraordinarily hard and starting out to be true to Smith and asking the question, why do you do that? So it seemed the, it was one of the ways in which Smith

opens up the theory of moral sentiments his first book

and it seemed the right way to sort of engage readers from a very broad, from a very broad array of readers. And when you open this way though, you didn't ask the question directly, you focused on this optimization,

“maximization, I think of it as sort of the,”

I think of it as the life hack industry, right? Here's a trick, here's a trick. You know, it's a shortcut, here's a fantastic way to, you can only have to sleep four hours

and you'll be even more rested. Here's a seven minute workout. I just got my second one, I thought I, that, that fast died.

It turns out all I need is a chair in seven minutes

and I am gonna look so good. I'm looking at these guys on the web after seven minutes a day. Oh my, it's probably not true. I'm sort of thinking.

So I'm curious why you picked this focus rather than asking why do you work so hard. Obviously it's related to it. But you picked a focus of optimization. So I live in Silicon Valley, so you describe

as people have sleeping devices and people wear all sorts of complicated watches. Everything is to maximize their productivity and people are very much in rush to get where they're going. And so you look around and you ask why?

And then you look around and housing prices here

are truly astronomical. And there are other really great places in the United States one can live with just much more reasonable housing prices in the style of life. So there's a question of why we're doing this.

I think less on the optimization front, there was a personal aspect of this as well. I sort of reaching an age where I don't really have to work for money. And so there's a question of, okay, I'm working very hard.

Why am I doing that?

“Is this the best way for me to spend my time?”

So there was both a personal aspect and an aspect of looking at my surroundings. - Yeah, I've quoted it before. There's a line from the poet, charred bandley Hopkins.

I am my work for that, I came. I mean, that's what I'm on this earth for is to do. And it is a very deep question, right, of how much is too much enough, et cetera, what else you would do at the time.

And then the question of motivation, and of course Smith understood that often and other economists understand this too, what we say when asked why do we do it, is that I was the same as to why we actually do it.

And what Smith say answers to why we do it. - So Smith, it's a very interesting contrast with the way most economists approach it, it's Smith argued that the key reason, the key motivation is that we work to be seen,

we work to be admired, we work to be praised, we work to be held in a steam. So a lot of our motivation is to get this approval from others. And the reason why it's a contrast

with much of economics is that one of the main ways that economists model human behavior motivation is that my happiness or utility is based on what I consume, independent of what goes on around me. And I think anybody who has kids

and anybody who engages with the world quickly realizes that that's not the case, that we are very much social animals. And this is from the beginning, this is what Smith argues that even our sense of right

and wrong or moral sentiments is very much shaped by social interactions or their parents and our community more generally. So that that's the essence of Smith, is this is that a big motivation is seeking

this esteem and approval of others. And then he says, look, this is, this is, won't bring you happiness, this won't bring you tranquility

“that you have to look inside to this impartial spectator”

and look to be admirable, not admired by others and to be lovely, not necessarily seeking love

And it's a deep insight into what motivates us

and a deep insight into what can make us truly happy in the long run. It's quite remarkable that somebody who's only known for narrow perspective of what the invisible have means is writing as you explain extremely well in your book,

essentially a self-help book on how to live a good life. - Yeah, well, link to an essay a recent essay by Tim Ferris, who's been a guest on the program. - I really like Tim, Tim is, in many ways, the king of the self-help world.

It's got the four-hour work week, which is very it on the seven-minute exercise. He's got a lot of life hacks. And many of those he's practiced and experimented on himself with it, it was getting, he's got to quite it,

it was thing, business model. But he recently wrote a startling essay that says, you know, this self-help thing may not actually help

and that if you're always focused on yourself

and making yourself more effective and happier and so on, you might end up being quite unhappy. It's a wonderful piece and it's a wonderful,

“I think, revelation for him, we'll see how long you last,”

but it'll change the way he, I think, behaves and writes going forward. But I think this question of what motivates us and the people around us, the social pressures we face, it's a weird thing because, you know,

you said you're in your own life, you're thinking about it, but you've been extremely successful at academic, you've taught it, some of the finest universities in the world. And then enough, I mean, really, are you going into the office now to rack up

even more points, don't you have enough love

than an admiration for people around you

is already thinking you're stuck in a habit that you acquire from one or two? - I don't think you're stuck in a habit. - Sorry about that. - No, it's a very good question,

but I think at least for me, I think I have an answer. So in terms of having the love and the approval of people who are closest to me, I am just extraordinarily fortunate.

The issue for me was of one of work and I think there was a driving force for much of my life to be held in a steam, to be approved of, to have, to acquire a certain rank. And there's no question that this was a driving force.

“And I think over the last five to 10 years,”

there's been a reflection of, okay, now what do I want to do? And I think what motivates me now, I don't think I worked that much less, but what motivates me now is to explore something different.

For example, much of my life has been this, you know, it has been mainstream economic analysis, methodology, identification, my work on finance. And I think now it's, I want to explore something broader and right for a broader audience.

And I may fail, but it's something that gives me a lot of joy, this reading about Smith, has just been thrilling and I'm writing a book that is more geared toward a broader audience and it's not, it doesn't have empirical work

or any regressions in it. And so that has been very satisfying for me. And I think reading Smith gave me a little bit of Vectra insight and permission to do these other things. That's nice, I probably quoted it before,

but I love this quote from George Allen, who was the coach of the Washington Redskins, who supposedly said, he supposedly said, I don't send Christmas cards, they don't help you win football games.

And I don't know if he meant that. I have a feeling you did mean it actually,

“and I think a lot of economists have that attitude”

and their version would be, I don't do acts, whatever it is, because it doesn't help me get peer-reviewed articles in top tier journals. And that treadmill that a lot of academics are on,

it's interesting because part of it is as you get older, as you're suggesting, you start to wonder whether there are some things that might be better, your time might be better spent on. It's also a question whether that particular treadmill

is gonna pay off the way it used to, right? We're in a very interesting moment with respect to peer review, which is-- - Yep. - To disrepair, excuse me, it's falling into disrepute, and AI, which might be generating thousands of new articles

but it will probably change the way some of our colleagues

behave. I want to talk about the parable of the poor man's song. - I just want to interject something that I may be the only one of your only guests who knows who George Allen is, so.

- That's true. - That's true. - Yeah, it's exactly, I noticed that recognition, when I mentioned it, so the poor man's song, the parable, the poor man's song,

I'm tempted to read it, but it's very long, but it's great, and we'll put a link up to where he can find it.

“Describe that, what is the parable, the poor man's song?”

And why is it relevant for this conversation?

- So it's a Smith story, but it's a story that has been told again and again in many different forms. So I think for listeners, it will be very familiar, but it's a story about a young man who's poor, who's sort of sees what the rich has,

and looks at all the glitter, and looks at the esteem with which the rich are held, and says, if I can be rich, if I can acquire that wealth, I will have that esteem, and approval, and that will make me happy,

and the word he uses is Smith uses, is tranquil. And so it's about this person who works his life, and neglects his family, and neglects caring for himself in many ways, and then as old age hits, he realizes how much he has missed,

how empty his life is, and that even though he is rich, all of this outside external esteem, doesn't leave him tranquil because of the choices that he may have made throughout his life.

And so it's a story about ultimately feeling regret,

and about not making the types of choices that would have led to a happier, more tranquil life for him, and it was about seeking the approval of others in a particular realm, becoming rich, rather than seeking internal approval,

and being of Woody with Smith to say a virtuous person, and a good person, some of the things that you talked about, being benevolent, and good to other people, treating people well, and that he neglected those essentials, I mean, how about yourself, how do you read it?

You are very much an expert on Smith,

“and I'm curious, do you have the same perspective on this story?”

- I'm not an expert on Smith, I only play one on TV on podcasts and videos and YouTube, but I love the story, but I think there's a piece to it that it's especially interesting. Certainly, he emphasizes the sacrifices that the poor man's son makes.

It's interesting, by the way, it doesn't come to poor man. It's the poor man's son, so this person wrote this up in this environment of disappointment, and I think about ridiculous association, but I think about LBJ, and Robert Carroll's biography

that his father was a small-time politician, who was a very honest man. And his honesty limited his, his descent, and acquisition of power, and LBJ is a young man, and a boy thought, that's not gonna be me.

I'm gonna cut every corner, and I'm gonna show the world, I'm not gonna be like my dad, so he was in many ways the poor man's son, in terms of both financial wealth, success, and also political power.

But anyway, the poor man's son, he looks over with envy at the rich man's son, growing up in ease, fascinating to me. He's talking about the American dream in many ways. This idea that anybody can succeed through hard work,

which of course, its mistake wasn't particularly true. They could happen, I guess. And Smith was particularly worried about people who would follow corrupt paths as a way to acquiring wealth, because there was much harder to say,

start a business or put yourself up at your bootstrap, or whatever language you wanna use. But anyway, so part of it is the sacrifice,

“the things you have to do to acquire the wealth,”

but the other part is that the wealth itself is so empty. And I don't know, you know, it's Smith's age, all right, I joke about it a lot in my book, you know, the technical and electrical devices of Smith's times were ear pickers and toothpicks.

And it's, you wonder if Smith in today's world

would be a little more understanding of the desire to acquire some of those things.

“But I think the essential part is exactly what you said.”

This is the wrong path. There's a certain condescension to Smith's story, saying to this kid, don't be a fool, you know, no, you're not gonna like this when you get what you want. Be careful what you wish for.

And of course, the long time listeners will know that my favorite quote from Smith's, which you've alluded to already, man, naturally desires not only to be loved, but to be lovely.

And loveliness, meaning,

being praiseworthy, admirable,

as opposed to praised and admired, love a bull rather than just loved, being intrinsically good is Smith's recipe for happiness and in particular, to be a pretty, it's a really subtle point 'cause he's not saying

it's foolish to care about what people around you think.

“But he's saying you should have a certain perspective on it.”

Talk about that. - Well, my understanding was that the perspective on this is that it's okay to want to be held in a steam to be approved of. But that you develop an impartial spectator,

a conscious we may call it today, a sense of right and wrong that's developed from really the moment you're born and you start to interact with your parents, do you get a smile, do you get a hug,

do you get approval? So it's very, he, he, again, very contrary to some of the philosophers that time in the country to some economists, your sense of right and wrong is based

on your social interactions. It doesn't just emerge. And that when there's a consistency between being this good, virtuous person, this person that your conscious approves of

and being in a society that also finds those things admirable, then you, I read Smith saying that this is when you have a very good life. But like you say, there's, there's, you get to this more when he moves to the social interactions

between an individual's choice and society is there's very much this notion that if if you're admired for the right things, or kind of virtue, then you will pursue all sorts of activities that seek to gain that approval that are consistent

with yourself that will be socially beneficial. If in contrast society admires only wealth, regardless of how it's achieved, for example, through fraud or through coercion, or through other types of force,

then this is going to encourage those types of actions on the part of individuals which will cause this distinction between gaining the approval from outside and having the internal approval of your own actions. That's was my reading of it.

- Yeah, I want to take a quote to you, have you elaborate on it from your letter.

Before we do that, I want to talk for a second

and get your thoughts on imposter syndrome.

“So imposter syndrome, I think, is the idea”

that you know you're not worthy, but other people don't. And so you're treated in a certain way, but you're an imposter. You don't really the person that they think you are. And it seems to be such a common human insecurity.

I certainly have it and I often, and I feel often, I get put in your quotation when you said that you're not an expert on Smith. Just play one on TV, it was a great, it's a good joke, but there's an element of the imposter element.

- Exactly, it's what I said. - When you wrote a book, you really are an expert on Smith. - I'm not so sure, I'm serious, but I don't know, but I do know there are people not a lot more about that on Smith than I do.

So in that sense, I think I'm something I'm an imposter when I get treated as an expert, but I'm thinking just in general about the kind of esteem that people have for us in our social circles that are among our friends and family.

Often, of course, we know more than they do about our shortcomings, they're not just a match, and they're sometimes real, but what Smith, I think is saying is that you want to avoid that if you can. You want to achieve your reputation honestly,

and match what people think of you.

- Yes. - No, it's a very good point, so now we can develop it,

“to evolve into psychotherapy a little bit here, right?”

- Sure, great idea. - Yes, we all sort of feel the sense of maybe not all of us, but I do, many people do have this end of the imposter syndrome. And I think, at least for myself, part of what has happened over time is to just not engage with this thought

of am I really what people think I am. And it's simply to say, I am what I am. People will make their own assessments, and I am just going to try to be professional to do my best and to be as comfortable as,

as I can with trying to be a good person and a good economist. And so, and again, I view that very consistent with Smith and why reading him, it's really starting to read him 10 years ago,

or so, was, had a very positive effect on my own approach to life more generally. And that's why I thought your book, and I think that people reading Smith, or these can be a useful way to lead a happier life.

You know, it'd be a good, yeah.

“So I think that you brought up a point earlier”

that Smith did not view one's happiness simply as what they consume, that he did this notion of virtue of being praised worthy was how one dealt with society as a whole.

This did not mean for going self-interest, but it did mean not being greedy. And it meant, so he was, for someone who lived very much alone as a scholar, he had a very intricate view of how people engage

with society more broadly and how important that was for their own sense of content. - See, have a really nice way of putting it here from your letter. You say, you know, make a reference to the,

we have these two desires. We want to be loved. We want people to think highly of us, respect it, admired, et cetera, praised. We want to matter, right?

That's what Smith's saying. And at the same time, we want to be lovely. We don't just want to be loved. We want to merit these reactions from the people around us. And you write, this is very, I think, very deep.

You say, these two desires are easy to confuse. The love of praise seeks the opinions of others. The love of praiseworthiness seeks inner integrity. One depends on spectators. The other depends on conscience.

One is fleeting and hollow. The other is steady and deeply satisfying. Much of human dissatisfaction comes from pursuing the first one, neglecting the second. How do you know when you were truly praiseworthy

“and not really flattered for this, you must look within?”

And I think this is a great insight about these two things that we care about both them, obviously.

We don't, we don't want to always fool people

that were successful. We'd like to have no imposter syndrome. But basically, it's a question of getting your motivation from the outside versus the inside is what you're saying. You want to expand on that?

Not what I wish I was insightful enough to say it. But I'm just trying to say what Smith said in a sub-stack language. So it's easy to digest. So yeah. But then you go on and you say, when your labor serves the desire

to be worthy, rather than merely admired, everything changes. Ambition becomes a source of meaning, rather than anxiety. Hard work brings satisfaction rather than exhaustion. So we're card by all means.

But first, ask what desire your work serves.

Ask not, will this impress others, but rather will this satisfy the impartial spectator within? It's a great advice. Yeah. And by the way, so I was, when I have lots of letters to go,

but I kind of wrote the first, first, four. When I'm writing those, just aproposive this, I would wake up in the morning and it would be like dark outside. And I'd like, man, I really hope it's past five, because then I can start up and kind of keep working on those

on the letters. And so that's, I think, very consistent with Smith's view

internally and maybe we'll pay it.

Very, it's just wonderful to be on the show with you. But it's, it's, he's not against working hard. He's against, you know, are you working hard in a way

“that is really going to give you this an inner piece?”

We're inner piece and content and also involved serving a social role. Yeah. And I think the challenge, of course, is easy to say that. It's easy to give this advice, and it's so much harder

to actually follow the advice. And what thoughts do you have on how to help people internalize that message of listening to your inner drive versus your desire for approval of others? That's a very good question.

So first of all, I do recognize that I am in such a,

I don't want to use the word privilege because it's overused, but I am in a unique, unique position. And so, and many people must do a lot of work on things that are not intrinsically satisfying, but that provide the means to support their families.

So that is, and that's has to be recognized. So the point is that within the context of the control that somebody has, and if they're fortunate enough to have really what they need to survive, to ask themselves what they are doing,

and why they are doing it, have some introspection. And to think about the degree to which they're working to try to gain approval from others. Because those others, their opinions can change day to day, week to week, and you may devote your life,

and they may approve of it now and disapprove of it later, and they may be on to the next shiny thing that they're going to admire. So there's a sense of trying to get learn about yourself and figure out is this something that you, we, me,

as an individual, want to pursue. View as worthwhile, and that it's a, it can be a false and constantly moving target if one is seeking the approval of, quote, the others. And I think that's, I think that's how,

I would frame it, say, for my kids who were trying to make their way in the world, then or not, and turning toward their late '60s with the comforts to be able to just pursue their intellectual curiosities.

“- Yeah, I think, I think there's some soul work”

that has to take place, and that's a phrase that's increasingly falling out of fashion, and anything with soul in it is as out of fashion is quote, "We don't have one." But we do have something deep inside us that drives us,

and what I mean by soul work is, I think it's worthwhile for young people to put some time and figure out who you want to become, and I think that's part of what's been stalking about, and that work is not easy.

There are many ways to get there from here. Religion, I've mentioned this before on the program, therapy, meditation, reading great works of literature. I think all these help people figure out who they want to become, and what's at their core

that matters, and it's worth spending some time on that, as opposed to racing ahead.

“I think there's a fear that if you don't race ahead,”

you'll be left behind, and that's probably not a good worry.

- Absolutely, let's turn to your second letter,

which is what I love for many reasons, but one of which is just you ask a question that I think most people wouldn't associate with Smith, or I think it's particularly important. You ask Smith asks through your voice,

"Are you admiring the right people?" And most of us don't think about that much. We might think about who our friends are, who, we spend our time with, we all understand that we get influenced by the people around us,

but really what's the harm of admiring, film the blank, some entertainer, some athlete, some flawed human being, we all are, because of their one piece of their success say, and you could argue, it really doesn't matter,

- I think I decided to focus on it for two reasons.

“One is that I really saw it as essential”

to portraying Smith, that this is something that he viewed as very important, 'cause we'll talk about this as we go,

that links up to what he viewed as essential

for prosperity broadly defined, and that is justice. And the other reason was that I wanted to, I wanted to talk to people today, especially today, especially given the media and the political environment, that when we admire people,

we tend to want, we want, part of that is wanting to become like them, and part of that is, cutting them some slack on whatever they've done to get there, and part of that is giving them whatever they say, more credit than maybe it deserves.

And it poses again, the question that goes back to the way I'll put it the way you put it, like, who do we want to become? Are these people virtuous? Are they good?

Are they benevolent? And, or are they just rich?

Have they become powerful through good means?

And so is that what we want to reward in society, via our admiration? And again, it comes back to what you're saying, it's like, who do we want to be? And part of who we want to be is what do we value?

So I very much like the way you pose it, I think that's wonderful. And so those two reasons, it's really very true to Smith. It's not looking for something on the side where I wanted to say something,

and I looked to Smith, this is front and center. - And he has a lot to say, that's really fascinating,

“and I think it's completely underpercated”

about how we admire the powerful.

And of course, there's two ways to be loved, one is to be virtuous, and we'll talk about that a little bit, the other ways to be rich, powerful famous, and rich powerful famous people are loved, meaning admired, praised, people pay attention to them,

they matter. And Smith has a lot of fascinating psychological insights on how much we care about people who are not in our lives, famous people, that their narrative goes well. He has a lot of thoughtful things to say about

the suffering of kings, and the thriving of kings, and how we want their stories to turn out happily, and when they don't, we get upset. Even in their horrible people, in their despots, even in their autocrats, and so that's a fascinating thing,

which we're not going to talk about, but what I'd like you to talk about is you actually make a very bold claim. You argue that admiring the wrong people isn't just, you call it a harmless social habit, you say it's not that.

You say it threatens the foundation of a free society. You give more reasons, I have them here, I don't know if you have them nearby, if you don't by heart, so I don't want to put you on the spot, so if you need help, I'll help you out.

But you give more reasons for why this is socially. In other words, not just personally, you think a lot of that person, that person's not so nice, not good for you to admire somebody who's not a nice person.

And I think a lot of our entertainment, which honors gangsters to be blunt, murderers, thugs, people who shed blood on screen,

“and we think they're cool, and I think that's really unhealthy,”

personally, a corrodger soul, or your inner cell. But you're worried about the social set, the social impact of this, talk about that. - So I would point out just as a quotation, which I think I'll get right, but when I say Smith really emphasizes,

he's sort of calls this admiration of the rich and the powerful kind of the major threat. It means the major source of the corruption of our moral sentiment, so the be-mager way in which our sense of right and wrong is corrupted.

And so he very genuinely thought that this was an enormous deal. So let's see if I can get all four off the top of my head. So I think one is very much as an economist

and that if society, if we admire the wrong types of activities and people want to be admired,

“then they are going to engage in the wrong types of activities.”

And so this is really essential,

and it feeds into his understanding of the motivation of human beings. So that's one. And so he's not saying that the rich and the power are because they are rich and powerful on virtuous.

But he's saying that they're not necessarily virtuous because they're rich and they're powerful. And if we admire the one thing, the rich and the power as opposed to the virtuousness, then that is what's going to lead to potentially fraud and coercion.

And really the disintegration of a free society. That comes to the next point, which is both about a free society and a peaceful society, and also later what leads to his notion of how the market is going to work, to foster prosperity.

And that is how much he stressed justice. So a sense of rules and a judicial system that focus normal self-interest in ways that are socially benevolent. And so the issue here is that if what we do is we admire the wrong people, or we admire the wrong activities,

simply if we just admire wealth, then this can give rise to fraud and the seeking of various types of monopoly privileges and the undermining of the judicial system. People have less faith in the entire social apparatus.

You can have a breakdown of a freedom because for Smith, freedom and the market ultimately are founded on a judicial system and a sense that the judicial system is reasonably fair.

“And so that's why this admiring the wrong people”

is fundamental to Smith. The other two are interrelated with these. And that is that if we admire it, you told us the way you told the story about the kings.

We want the rich and the powerful, we admire them.

We want them to do well. Part of that could also mean that we cut them some slack when they do wrong. And that again means that the judicial system fails to provide justice.

And again, people can lose faith if it's not a reasonably equitable administration of justice across people. So there's one more. Yeah, there's one more. I'm slipping my mind right now.

You had it. But I think it's-- oh, you said, misplaced admiration breeds, sirvility. They went for differential to those above us and negligent towards those near them.

Yes. So in many-- I would guess that in many of the places where people work, people can become extraordinarily deferential to those in positions of power across a number of dimensions. And therefore, rather than calling out or speaking up

when they view things as wrong, they will defer. And that's part of this admiration of the rich and the powerful.

And again, it's not the rich and the powerful,

just because the rich are powerful. It's admiring them for reasons other than their verver virtue and their honesty and their degree to which they live a life of integrity. And if that's the case, then we're going to defer

to leaders who don't exhibit those types of virtuous traits. We're going to defer to people who have achieved power and wealth regardless of how they've gone about it. When I was a little boy, my father gave me a book of stories.

“I think at the time, it was probably not really”

at the time, but in his time. And he was a little boy. It was a book that was influential. And it was stories of virtue, one that I recently

was the story of Damon and Pithias.

Damon and Pithias are two friends.

“The king sentence is one of them to death”

for treason or some-- not real reason, actually. It's not treason. He doesn't like the king or he says something bad about him. So the king sentence seems to death and Damon. I'm not sure which one it was.

I'll pretend it's Damon. Damon says, can I just before you kill me? Can I go home and say, goodbye to my family? And he says, I think I'm a soccer. I think I'm going to let you go.

Is he pretending you're going to come back? I mean, this is ancient times. It's not like a can't put a track device on him. It doesn't have GPS.

So he says, no, you can't go.

And he says, his friend, Pithias, says, I tell you what, I'll stand in his place. I trust him. I know who'll come back.

“And if he doesn't come back, you can kill me.”

Of course, really an unsatisfying outcome for the king. But he's relying on the friendship, which he understands is real for whatever reason, why, I don't know why. But he knows it's real. So he knows that he thinks the other one will come back.

So he lets him go. And of course, the execution is scheduled for 9 a.m. a week from then. And it does not back the day before. He's not back that night.

He's not back that morning. It's 730. And is there about to kill poor Pithias, David Burst in the door, and says, my ship sank. And I got robbed by bandits.

And I did the best I could do. I'm really sorry. I made your nervous, but here I am. And the king part is both of them. And because he's so impressed by the friendship.

And the loyalty and the kindness. And he says, I apart you in condition that you teach me to be as good a friend. And you know, those are the kind of stories I grew up with. I'm not saying I'm a good friend.

I don't have no idea if I'm a good friend or not. I'm particularly good friend. But I'm more interested in the fact that in America, when I was a little boy, people were raised on such stories.

They were not raised on the road. They were not raised on the kid who did the wrong thing and got rich and got, you know, was the cool kid. And something happened in modernity. I think I'm not sure what it is.

It probably goes well before my childhood. Something about the 20th century that simple virtue became somewhat for suckers. And that's a bad thing for society. It's a really bad thing.

I think that's what Smith was saying. It's what I understand you to be saying that the people we admire who we see as role models matter. And I once heard a talk. We're in March and the Academy Awards are coming.

There are the people we admire. They get all the glory.

They a billion people are watching.

I don't know how many millions, tens of millions in America. These are the people who are the coolest. These are the people who are loved. And they're, I mean, I like them a lot, some of them, but they're actors.

And they're not truly virtuous people. They're killed. I like what they do. They've given me a lot of happiness and satisfaction. And they've moved me to tears and made me laugh.

But they're actors. It's not the most. We don't have an Oscar for the best people. We have an Oscar for the best movie stars. Yeah.

Yeah.

“No, I think, I guess I would, I think what I'm not sure of.”

This is this is what I'm not sure of in the US is there's an admiration for what glitters let's you point out. I would say that there's an admiration for certain political leaders that, to me, doesn't seem to be based on virtue or what Smith would admire. Yeah.

But at at at at at very local levels that those those types of traits, I think are still very much valued. For example, I'll just give it a small example. My parents had a small, had a small house in Maine. And the neighbors couldn't have been more different politically.

And it was simply not possible to discuss national politics with them. But in terms of if I needed anything and if they needed anything, we would be there for each other. And at a local level dealing with how to raise money to address this problem,

And in terms of the story, you gave about the friends going for death.

“I mean, trusting with money, resources, houses, anything.”

So this, there's sort of in me a hope that some of those traits that we see in each other, these smaller levels, can with some work replace what's going on at a bigger level. There's a, there's a hope in me that some of the anger, some of the constant desire to be angered by what's going on at the national and international level, where we tap into that all of the time.

And the media feeds it to us all of the time, that will become tired of it. And maybe my optimism is irrational.

But seeing it at a small level, I'm hoping we can reclaim it at a bigger level.

Yeah, I think that's a great point. That's a great point.

“And I think there is a temptation to think to politics as the most important arena.”

When, in fact, usually it is not, it is the interactions we have with the people who live near us, our friends, our family, and so on, you know, being a good brother, being a good sister, being a good parent, being a good child, these are so much more important than being a smart voter, or wise consumer, social media, I'm going to read this quote from Smith, which I love.

But it kind of summarizes what we've been talking about, then when I close with something else, quote, "To desire to acquire and to enjoy the respect and admiration of mankind are the great objects of ambition and emulation." Two different roads are presented to us equally leading to the attainment of this so much desired object.

The one, by the study of wisdom and the practice of virtue, the other, by the acquisition of wealth and greatness. Two different characters are presented to our emulation, the one of proud ambition and ostentatious evidity, the other of humble modesty and equitable justice. Two different models, two different pictures are held up to us, according to which we

may fashion our own character in behavior. The one, more godly and glittering and it's coloring. The other more correct and more exquisitely beautiful, it's outline, the one, forcing itself on the notice of every wandering eye, the other attracting the attention of scarce anybody, but the most studious and careful observer.

They're the wise and the virtuous chiefly, a select, though I'm afraid, but a small party who are the real and steady admirers of wisdom and virtue. The great mob of mankind are the admirers and worshippers, and what may seem more extraordinary, most frequently, the disinterested admirers and worshippers of wealth and greatness. Close, close.

How can you not love this guy now? When you read that, it's so beautiful, I kind of then question, why do I have to rewrite it in a way for substrate, just read the guy?

“Yeah, he's a, you can't, that's why it can be annoying when smith gets caricatured, like”

in the movie Wall Street with Michael Douglas, you know, greed is good, and all it's like, that guy's not saying greed is good, except why not. Anyway, it's just such a fascinating thing when you're observation that you just read some math, the reason smith is great, I want to suggest, there are many reasons, but one of them is, if you summarize that with Chachy PT, and you don't have to use it, because

it's pretty easy to summarize, it says, pursue wisdom and virtue, don't pursue wealth and fame, and that's good advice kind of, I guess, but that's not why smith is great, because he's giving you good advice, he's giving, the reason he's great is he says it

in a way that, first of all, warns you about the temptation to take the wrong path.

He's explaining to you how easy it is to succumb to the seductions of wealth and fame, and that's great, he's telling you an insight about your own character that you might otherwise, he's not just lecturing, he's not just preaching at you, he's giving you an insight into the human heart that is quite profound, it's interesting to think about his own life, he was pretty well, he wasn't a popper, he wasn't the poor man's son, or the poor man,

I might have been something of the poor man's son, but most of his life was devoted to

and, of course, he's an easy guy to be friends with, he's very stimulating company,

“but you could debate how well smith lived up to his own advice, but I think he did pretty good.”

Oh yeah, I think so too. I think the other thing, by the way, in the quotation, just building on what you were saying, is that he also, this goes back to the beginning part of our conversation, is that he sort of says, look, it's quite natural for us to seek this admiration of others. You know, part of the, that's part of the reason we work hard, and he sort of is telling you, we're this conflict comes from, because we seek that, and yet we're socialized, we have this

internal, you know, impartial spectators' conscious, and there can be a conflict, and that he wants us to reflect and find that path that is consistent with our internal, you know, our internal morality, your internal sense of, of right or wrong, and so it's, it's, it's, it's very nuanced, it's not like a wealth and power bad, and so it's, it's a very, very sophisticated perspective

“on human nature, and that's why I appreciate him so much. You know, I guess the other way”

to be critical of him is that he's one of the most famous people in the history of human thought.

Right, but, but I think, and this is a point about the nuance, he did not pursue that in a particularly aggressive way, he did not count how many downloads of his YouTube video describing the wealth of nations in eight minutes, he was able to get across he lived in a different time. It was harder to be as ambitious as it's possible to be now through all kinds of ways that are not so healthy for the soul, but it is, um, he, in a way, got lucky. You know, I don't think he

intended to be the greatest economist or most influential economist of all time. Let me ask you a question. Where'd you go to graduate school?

“UCLA. Did you read semethic graduate school? What years were you never?”

No, I didn't read semethic graduate school. There may have been small, small segments of the wealth of nations, so actually reading the reading of the theory of moral sentiments, if, if, if, I'll tell you a little story about that. So, um, my father who is a professor of history and a Marxist, um, and writes a lot of books on Marx felt that, um, Marx did not understand Adam Smith, and so he, who is this is during COVID, and he wanted to read Smith with me. So he decided to start with the

theory of moral sentiments, which I, like I had mentioned, had not read. So we were going to read this chapter by chapter section by section and then chat. So we read, and then we got together, and I was very annoyed with my father because I felt that he had read Smith, simply trying to find in Smith what he wanted to read. And then I realized that I had read Smith, simply wanting to find in Smith what I wanted to read. And so I went back and I read the sections again, and, you know,

first I had highlighted, then I had highlighted more, and then I realized, man, I can't caricature

this guy into what I want him to be given as a modern trained economist, and it was just taking a deep breath in reading and appreciating him, and then talking to my father about it. And as I mentioned to you outside is that, but it's how I got done reading Smith, the entire book was essentially highlighted and I had to buy another copy so I could read it. And so that's that's sort of how, I so, no, not graduate school, way after graduate school. But I, and so, you know, I had to read,

I think the division of labor chapter, maybe the compensating differentials labor, way to chapter for my labor economics class in graduate school, but I suspect Smith not read it all anymore, it's a graduate level of economics, and just to tell a quick story when I gave a seminar on Smith, at an institution I won my name, one of the faculty who doesn't have a Nobel Prize, but he could get one sooner than later, said to me, why would you read something written in 1759?

I was talking about the theory of moral sentiments. He said, haven't, has it everything in there been, you know, superseded by other things? I mean, don't we already know all this stuff?

all sentiment, 1759, not well, the nation, 1776. And I said, well, I wasn't quite sure how to respond

“to that, but I think it was done. We drove, this has been a guess, many times on the program,”

pointing me to an essay by Cose, we're on a coast that I'll link to, where Cose gives a, he writes an essay on assessing where you know, Smith's contributions. It's a fantastic essay.

And third, the answer says something about how, yeah, well, and I'm going to paraphrase it,

but you know, something like, you know, modern psychology, comma when it's true,

“comma has some of Smith's insights. I mean, you know, this great advanced, these great advances”

made over the last 250 plus years that they're kind of small. And Smith's wisdom and it's

cited to the human condition are just as vivid and probably as correct as they were then,

and are remain true and are worth reading for that reason. So that's, he's not a, you don't read him to find out the theory of chemistry in 1759, which we've made some advances. You read him to understand the human heart. And I don't think we've gotten that far since then. I couldn't agree more. I don't, I just could not agree more. It's funny to be, like, if you go to economics before the movement in behavior or economics, I mean, Smith would have looked at,

look, look at the profession, like, what are you guys doing? You know, have any of you sort of

“engaged with the world before, you know, so I think that, um, yes, and, and that like you say,”

I'm sure there've been immense advances in psychology, but Smith is, I think writing is century or more before psychology even becomes, it's, it's own discipline. So, and, uh, I think the passage you read earlier, there's, there's, there are a lot of insights, and, uh, I certainly not only have learned a lot, but have, it's given me a great joy, uh, learning from Smith, just been, it's been a real pleasure. My guest today has been Ross Levine,

check out his, uh, letters, well, link to them, and Ross, thanks for being part of E-Kontalk. Thank you very much for having me, it's been a pleasure. This is E-Kontalk, part of the Library of Economics and Liberty. For more E-Kontalk, go to E-Kontalk.org, where you can also comment on today's podcast, and find links and readings related to today's conversation. The sound engineer for E-Kontalk is Rich Goyette. I'm your host, Russ Roberts.

Thanks for listening. Talk to you on Monday.