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Das Adam Smith Problem

Das Adam Smith Problem. Peter Boettke Econ 828/Fall 2005 26 September. Main Points. Nature of the Conflict Tension between self-interest and reciprocal altruism Answers to the Conflict Tension is an illusion Self interest with guile is not how man behaves

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Das Adam Smith Problem

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  1. Das Adam Smith Problem Peter Boettke Econ 828/Fall 2005 26 September

  2. Main Points • Nature of the Conflict • Tension between self-interest and reciprocal altruism • Answers to the Conflict • Tension is an illusion • Self interest with guile is not how man behaves • Mises and Ricardo’s Law of Association • Tension is part of our evolutionary past • Hard wired from our tribal past • Implications • Efficiency and Cooperation • Moral Intuition and Moral Demands

  3. Nature of the Tension • The historical discussion • How can the author of The Theory of Moral Sentiments (which championed other regarding behavior) be the same person as the author of The Wealth of Nations (which championed self regarding behavior)? • Vernon Smith’s capturing of this discussion • Efficiency • Trust and cooperation

  4. Tension is an Illusion • Rational Choice as if the choosers were human • Myopia and Long term interests • Division of labor • Gains from cooperation • Biological competition versus Economic Competition

  5. Tension and Evolution • Reciprocal Altruism and Virtue • Nature Red in Tooth and Claw • E.g., Vampire Bats and the keeping of accounts • Tribal Past and Group Selection • Human survival requires cooperation • Adam Smith and the multitudes • Pros and Cons of Cooperation • Bridging and Bonding • Bonding in order to defeat

  6. Implications • The core problem at the heart of classical liberalism • Moral intuitions of the intimate order must be checked by the moral demands of the great society • Hope for voluntarism • Cooperation without command is within our ability; self-enforcing arrangements outside the realm of a sovereign.

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