There have always been two impulses in the history of economics: the impulse to build economics into a rigorous science, and the impulse to keep economics grounded in humanistic concern. These two impulses are not opposed — rather, they together constitute the vitality of the discipline.
Adam Smith wrote both The Wealth of Nations and The Theory of Moral Sentiments. Later economists have mostly read only the former, or cited only the former. But Smith himself knew that markets cannot function without a moral substrate. Without sympathy, there is no trust; without trust, no exchange; without exchange, no market.
It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. — The Wealth of Nations
This passage, cited in countless economics textbooks as the classic statement of market logic, has a premise — that counterparties can trust each other to fulfill contracts — which requires The Theory of Moral Sentiments to supply.
Today’s mainstream economics grows ever more sophisticated in method: causal inference, structural estimation, machine learning… the power of the tools is dazzling. But the more powerful the tool, the more it needs clear judgment about what questions matter. And judgment about what questions matter — about what is important — has never come from the tools themselves. It comes from historical depth, philosophical reflection, and concern for the human condition.
The two souls of economics — neither can be lost.
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