How Adam Smith predicted today’s wave of moral outrage

The rash of incivility, virtue signalling and outrage on social media is just the latest manifestation of a phenomenon Adam Smith knew only too well, says Merryn Somerset Webb.

Pro-EU and pro-Brexit protestors © Leon Neal/Getty Images

Both camps believe they have right on their side
(Image credit: Pro-EU and pro-Brexit protestors © Leon Neal/Getty Images)

I tweeted a question this week about Greta Thunberg. I wondered if anyone knew how she was getting home from the US after her meetings there. I am interested. One way on a sailing boat was impressive (no cabins and no loos..). What next?

One of the first responses was pretty clear. "Fuck your cynicism", it said.

Interesting, isn't it? The young man in question (I'm going by his photo) was so convinced (for no obvious reason) that I disagree with him on something and that he is right on that thing that "Fuck your cynicism" seemed to him to be a perfectly reasonable thing to say to a middle-aged woman he doesn't know. I hope no one involved in parenting him follows him.

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On the plus side for Adam Smith fans at least it is possible to see this little outburst of odd sweariness as just another example of the way in which Adam Smith forecast pretty much everything.

Consider this quote (my favourite at the moment): "Virtue is more to be feared than vice, because its excesses are not subject to the regulation of conscience." It's almost as though he invented Twitter and its epidemic of virtue signalling.

My Twitter correspondent need not refer to his conscience before being rude to me because he has, he believes, virtue on his side. You see this all over Twitter. But it isn't confined to the margins. The responses to Brexit are a classic of the virtue/vice genre.

Extreme Remainers feel free to spend years attempting to frustrate the 2016 referendum while referring to everyone who disagrees with them as a fascist because they believe that they have the moral high ground. If you know you are right absolutely 100% undoubtedly right it really doesn't matter how dirty you fight. It's ok to use every bit of arcane parliamentary procedure you can find to frustrate Brexit. Use some to try and push Brexit forward, however, and you are definitely an evil fascist dictator.

Extreme Brexiteers are often as guilty (different language, same dynamic).

It's the same in the US Bill Dudley can suggest, for example, that the Federal Reserve should get political and force the US into recession in order to get rid of Trump. Here's the relevant quote. "There's even an argument that the election itself falls within the Fed's purview. After all, Trump's reelection arguably presents a threat to the US and global economy, to the Fed's independence and its ability to achieve its employment and inflation objectives. If the goal of monetary policy is to achieve the best long-term economic outcome, then Fed officials should consider how their decisions will affect the political outcome in 2020."

There is no doubt that Dudley is about as anti-Trump as you can get, but there's a particular kind of madness in the suggestion that Trump is so awful and Dudley so very right that it is reasonable to forgo the political neutrality of the Fed to get rid of him. Nuts.

You can find examples of this kind of thing everywhere at the moment (it feels like more than usual but that might just be the Twitter effect). You could find that shocking; better, however, would be to use it as a reminder that human nature doesn't change and that Adam Smith was not just a great economist but one of the best observers of behaviour ever. If you haven't read Wealth of Nations and Moral Sentiments, now is as good a time as any.

Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.