Levin, Yuval. “Recovering the Case for Capitalism.” National Affairs (2010).
“A recovery of the case for capitalism should begin at the beginning. As always when we want to become reacquainted with ourselves, we Americans would be wise to start with a refreshing dip into the late 18th century, when our way of life was born. In this case, we should begin by dipping into Adam Smith, and the original case for capitalism, before returning to our own time.
The father of modern economics was a moral philosopher, a student of human nature and social institutions. His theories of political economy were thus one element of his larger project for the direction of human passions and appetites.
Smith began with a middling view of human nature, neither utopian nor cynical. He believed that even though human beings are fundamentally self-interested, we can be guided toward sympathy and benevolence. Our sentiments, he said, begin with a powerful self-regard that expresses itself in our desires for attention, praise, and recognition, and motivates a great deal of human behavior. Even our sympathy for others begins with ourselves: We feel compassion for someone in distress because we can imagine ourselves in his predicament.
But for Smith, the fact that our self-regard finds expression in a desire for approval offers an opening for moral education — for moderating both our passions and our animal appetites to make civilized life possible. Our ability to step into someone else’s shoes allows us to reflect on our own behavior, and to ask: “How would what I’m doing look to someone else observing me?” In that question — about that imaginary “impartial spectator,” as Smith put it — is the beginning of social order and of self-restraint, and so the first impulse to moral conformity and common social norms.”