Life is full of opportunity costs

Ryan Patrick Hanley poses two deep philosophical questions on the first two lines of the first page of his new book Our great purpose: Adam Smith on living a better life: “What does it mean to ‘live a [good] life’? And for that matter, what exactly does it mean to ‘live a life’ in the first place?” These are perennial questions. How should we go about answering them? At a minimum, we can all agree that life is full of choices, of paths not taken. (Fun fact: according to this source, the average person makes around 2,000 decisions per hour; from a purely economic perspective, then, we might say that our lives can be defined in terms of “opportunity costs,” since life is full of delicate tradeoffs.) This insight, in turn, poses more deep philosophical questions:

  1. What makes one path better than another?
  2. What standard should we use to judge what choices we make?
  3. And where should we turn for guidance on all this?

All of these eternal questions appear on page 1 of Hanley’s beautiful new book. His contribution is to show how the ideas of Adam Smith are relevant to these moral questions–not the ideas of Adam Smith the father of capitalism and champion of liberty–but rather the ideas of Adam Smith the great moral philosopher. For as Hanley correctly reminds us, before Smith authored his critique of mercantilism and defense of economic freedom, he was a Professor of Moral Philosophy for many years; before he wrote The Wealth of Nations (1776), he first wrote The Theory of Moral Sentiments (1759).

More specifically, three important themes in Smith’s first book are going to be especially relevant to these big questions and to our contemporary controversies today: (1) Smith’s notion of “sympathy”; (2) his imaginary “impartial spectator”; and (3) his theory of human virtue. What does Smith have to say about each one of these themes, and why are Smith’s observations relevant to our world today? I shall address those second-order questions in my next few posts …

Image result for opportunity cost

About F. E. Guerra-Pujol

When I’m not blogging, I am a business law professor at the University of Central Florida.
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2 Responses to Life is full of opportunity costs

  1. Pingback: Do grasshoppers dream of impartial spectators? | prior probability

  2. Pingback: Metaphors, markets, and morality (part 2): some questions about Adam Smith’s impartial spectator | prior probability

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