R. H. Coase Graduate School

R. H. Coase

7

spectator. But more important in reducing

the influence of the impartial spectator is a

factor which Adam Smith discusses at length.

We tend, because it is agreeable, to think

more highly of ourselves than is really

warranted. Says Adam Smith: “we are all

naturally disposed to overrate the excellencies

of our own  character.“9 Of our tendency

to indulge in self-deceit, he says:

The opinion which we entertain of

our own character depends entirely on

our judgment concerning our past con-

duct. It is so disagreeable to think ill

of ourselves, that we often purposely

turn away our view from those circum-

stances which might render that judg-

ment unfavourable. He is a bold

surgeon, they say, whose hand does not

tremble when he performs an operation

upon his own person; and he is often

equally bold who does not hesitate to pull

off the mysterious veil of self-delusion

which covers from his view the de-

formities of his own conduct. . . . This

self-deceit, this fatal weakness of man-

kind, is the source of half the disorders

of human life. If we saw ourselves in

the light in which others see us, or in

which they would see us if they knew

all, a reformation would generally be

unavoidable. We could not otherwise

endure the  sight.‘10

However, says Adam Smith, “Nature. . . has

not. . . abandoned us entirely to the delusions

of self-love.

Our continual observations

upon the conduct of others insensibly leads

us to form to ourselves certain general rules

concerning what is fit and proper either to

be done or to be avoided.” These general

rules of conduct are of great importance.

They represent the only principle “by which

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8

Selected Papers No. 50

the bulk of mankind are capable of directing

their actions. . . .  “11

The picture which emerges from Adam

Smith’s discussion in 

Sentiments 

is of man suffused with self-love.

“We are not ready” says Adam Smith “to

suspect any person of being defective in

selfishness.”    12 Nonetheless, man does have

regard for the effect of his actions on others.

This concern for others comes about because

of the existence of sympathetic responses,

strengthened because mutual sympathy is

pleasurable and reinforced by a complex,

although very important, influence, which

Adam Smith terms the impartial spectator

or conscience, which leads us to act in the

w a y   w h i c h   a n   o u t s i d e   o b s e r v e r   w o u l d

approve. The behaviour induced by such

factors is embodied in codes of conduct

and these, because conformity with them

brings approval and admiration, affect the

behaviour of the “coarse clay of the bulk

of mankind.”

Presumably Adam Smith

would argue that everyone is affected by all

these factors, although to different degrees.

It will be observed that Adam Smith’s

account of the development of our moral

sentiments is essentially self-centered. We

care for others because, by a sympathetic

response, we feel as they feel, because we

enjoy the sharing of sympathy, because we

wish to appear admirable in our own eyes;

and we conform to the rules of conduct

accepted in society largely because we wish

to be admired by others. The impact of

these factors is weakened by the fact that

the forces generating feelings of benevolence

have to overcome those arising from  self-

interest, more narrowly conceived, with the

perception of the outcomes distorted by

self-deceit.

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R. H. Coase

9

Adam Smith makes no effort to estimate

the relative importance of the various factors

leading to benevolent actions, but he does

indicate the circumstances in which, con-

sidered as a whole, they are likely to exert

their greatest influence. This subject Adam

Smith discusses in a chapter entitled “Of

the Order in which Individuals are recom-

mended by Nature to our care and attention.”

He says:

Every man. . . is first and principally

recommended to his own care; and

every man is certainly, in every respect,

fitter and abler to take care of himself

than of any other person. Every man

feels his own pleasures and his own

pains more

sensibly than those of

other people. . . . After himself, the

members of his own family, those who

usually live in the same house with

him, his parents, his children, his

brothers and sisters, are naturally the

objects of his warmest affections. They

are naturally and usually the persons

upon whose happiness or misery his

conduct must have the greatest influ-

ence. He is more habituated to sym-

pathize with them: he knows better

how every thing is likely to affect them,

and his sympathy with them is more

precise and determinate than it can be

with the greater part of other people.

It approaches nearer, in short, to what

he feels for  himself.13

Adam Smith goes on to consider the sympathy

which exists between more remote relations

within the same family:

The children of brothers and sisters

are naturally connected by the friendship

which, after separating into different

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