I have been participating in an Adam Smith reading group this winter and have thus been rereading various parts of Adam Smith’s first magnum opus, The Theory of Moral Sentiments (TMS), and I have also been sharing on this blog those passages from TMS that have caught my attention the most: see here and here (or below), for example. Here, I want to revisit the Scottish philosopher’s memorable three-part taxonomy of social groups (note: citations are to the Liberty Fund edition of TMS), which I sum up below as follow:

1. First, cut-throat and unpleasant “anti-social” social groups in which people “are at all times ready to hurt and injure one another” (TMS, p. 86, para. 3).
2. Secondly, amoral or mercenary utility-maximizing social groups in which people don’t have “any mutual love or affection” for each other (pp. 85-86, para. 2).
3. And thirdly, what I like to call lovely social groups where “assistance is reciprocally afforded from love, from gratitude, from friendship, and esteem” (p. 85, para. 1).

Now, I want to discuss a possible connection between Adam Smith’s three types of social groups and Thomas C. Schelling’s Strategy of Conflict (Harvard University Press, 1980). In brief, Schelling identifies three types of games or strategic interactions (see also here; citations are to the 1980 edition of The Strategy of Conflict):

1. Zero-sum games or games of pure conflict where one player’s win is always another player’s loss (pp. 83-84).
2. Games of pure coordination or positive-sum games where both players can win if they are able to coordinate their moves (pp. 89-99).
3. And what Schelling calls “mixed-motive games” with varying amounts of anti-social competition and pro-social cooperation (pp. 99-118).

I now want to propose a possible one-to-one correspondence between Adam Smith’s three types of social groups (cut-throat, mercenary, and lovely) and Schelling’s three types of games (pure conflict, pure coordination, and “mixed motive”) as follows:

1. People in cut-throat “anti-social” social groups are playing games of pure conflict; e.g. a mafia boss or drug lord ordering a hit against a rival.
2. People in utility-maximizing amoral mercenary social groups are playing games of pure coordination; e.g. the decision whether to drive on the right or left side of the road.
3. And lastly, people in lovely social groups are playing mixed-motive games; e.g. parent-child relationships, members of a trade or guild, etc.

What I love the most about this possible connection between Smith and Schelling is that it reveals a cool insight: people don’t live, play, and work in just one type of Smithian social group writ large; instead, people are simultaneously embedded in different types of social groups of various scales — i.e. playing different types of strategic games — depending on how the rules and payoffs of these games are structured.