Using Adam Smith to Cross the Road

Located 30 miles from Cape Cod, Massachusetts, the island of Nantucket has no traffic lights.

Where are we going? To Adam Smith’s laissez-faire.

Nantucket’s Pedestrians

Yesterday, standing on one side of a busy two lane road in Nantucket, I easily crossed to the other side. A driver heading one way saw me, slowed and stopped. Then, a pickup going  in the other direction did the same thing.

Because Nantucket has no traffic lights, most drivers respond to stop signs, rotaries, and courtesy. More often than not, if a pedestrian, a walker, or a biker needs to cross the street, cars stop. When someone is making a left turn or leaving a parking lot on a busy street, cars stop. And, drivers usually smile and street crossers wave thank you. The phenomenon appears to make everyone feel rather good.

Our Bottom Line: Laissez-Faire

Nantucket’s lack of lights continues to make me think about Adam Smith. In his first famous book, The Theory of Moral Sentiments (1759), Smith spoke about sympathy. Not referring to pity, he meant the ability to change places. Whenever we can imagine how we would feel in some one else’s shoes, we have sympathy for that individual.

Using the concept of sympathy, Smith took us to what he called the impartial spectator that guides our decision-making. Combining sympathy with our concern for how others judge us, our internal impartial spectator nudges us to do what we think is right. From there, Smith saw a community’s moral judgement emerging. He saw the roots of a “virtuous” society.

Rather than a top down government mandate, a bottom up civility can be one rationale for Smith’s laissez-faire. When we feel a “sympathy” for each other, we help to develop the norms that compose Smith’s “virtuous”  society.

Even making cars stop for a walker, that impartial spectator can be mighty influential.

My sources and more: To review Smith, I recommend this 2014 Econtalk podcast. But if you want some readable detail, James Otteson’s Adam Smith was the best I have found. Then, for a slightly different spin but the same perspective, do go to this Cafe Hayek post.

Please note that several sentences in today’s post were published previously at econlife.