Academic journal article Economic Inquiry

Adam Smith's Concept of Self-Command as a Solution to Dynamic Inconsistency and the Commitment Problem

Academic journal article Economic Inquiry

Adam Smith's Concept of Self-Command as a Solution to Dynamic Inconsistency and the Commitment Problem

Article excerpt


In his famous letter of July 28, 1759 to Adam Smith, David Hume objects to Smith's conception of sympathy. Hume argues that Smith fails to explain apparently contradictory possible pathways of fellow feeling. (1) The first pathway, as Hume exposed in his early writings (Hume 1896; Sutrop 2007), shows that fellow feeling is contagious. As a result, fellow feeling escalates the original emotion. The second pathway, emphasized by Smith, shows that fellow feeling is noncontagious. As a result, fellow feeling mitigates or attenuates the original emotion. Hume therefore asks in his letter how "intimate Friendship" with someone in pain could attenuate the pain and even engender a counter movement of joy--when fellow feeling in "ordinary Cases," such as with an "ill-humord Fellow," escalates the original emotion and engenders "Damp on Company":

I am told that you are preparing a new Edition [2nd edition of Theory of Moral Sentiments] and propose to make some Additions and Alterations, in order to obviate Objections. I shall use the Freedom to propose one, which, if it appears to be of any Weight, you may have in your Eye. I wish you had more particularly and fully prov'd, that all kinds of Sympathy are necessarily Agreeable. This is the Hinge of your System, and yet you only mention the Matter cursorily in p. 20. Now it wou'd appear that there is a disagreeable Sympathy, as well as an agreeable: And indeed, as the Sympathetic Passion is a reflex Image of the principal, it must partake of its Qualities, and be painful where that is so. Indeed, when we converse with a man with whom we can entirely sympathize, that is, where there is a warm and intimate Friendship, the cordial openness of such a Commerce overpowers the Pain of a disagreeable Sympathy, and renders the whole Movement agreeable. But in ordinary Cases, this cannot have place. An ill humord Fellow; a man tir'd and disgusted with every thing, always ennuie; sickly, complaining, embarass'd; such a one throws an evident Damp on Company, which I suppose wou'd be accounted for by Sympathy; and yet is disagreeable. (Hume in Smith 1977, 43)

Put differently, Hume is asking how could fellow feeling with a parent in pain over the sickness of a child mitigate the parent's pain, while fellow feeling with people involved in mob activity escalate their emotion.

Smith was well aware of Hume's view of fellow feeling. In response to Hume's letter, Smith (1977, 48) claims that he answered Hume's objection and thinks that he "entirely discomfitted him." What is Smith's response? Smith argues that sympathy is about understanding and, as a result of Smith's definition of understanding, it inextricably entails moral judgment. Such judgment, by definition, mitigates, rather than escalates, the emotion of the principal--where the term "principal" is reserved for the person whose emotion/action is being judged. If so, moral judgment, which is totally based on the emotions, amounts to the exercise of self-command in that the agent restrains or commands his original emotion by far-sighted emotion. With this notion of sympathy, or its sister of self-command, Smith solves the problem of making rational decisions in the face of temptations, known also as the commitment problem or dynamic inconsistency: How can agents command their temptations and cooperate voluntarily when, in light of instantaneous reward, it is so enticing to cheat and indulge?

The purpose of this article is to examine Smith's solution and its ramifications. To appreciate Smith's solution, we need to understand Hume's objection. Section II therefore analyzes Hume's objection, called here the "fellow-feeling paradox." Section III then discusses Smith's response, which is the core of his theory of self-command. Section IV shows that Smith's notion of sympathy amounts to rational decision making that is used to solve the commitment problem (dynamic inconsistency). (The commitment problem concerns succumbing to weakness of will, which is defined as choosing an option that undermines the interest of future self to an extent judged as suboptimal. …

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