Tag: Adam Smith

Making Compassionate Decisions: The Role of Empathy in Decision Making

“The biggest deficit that we have in our society and in the world right now is an empathy deficit. We are in great need of people being able to stand in somebody else's shoes and see the world through their eyes.”

— Barack Obama

You don’t have to look hard to find quotes expounding the need for more empathy in society. As with Barack Obama’s quote above, we are encouraged to actively build empathy with others — especially those who are different from us. The implicit message in these pleas is that empathy will make us treat each other with more respect and caring and will help reduce violence. But is this true? Does empathy make us appreciate others, help us behave in moral ways, or help us make better decisions?

These are questions Paul Bloom tackles in his book Against Empathy: The Case for Rational Compassion. As the title suggests, Bloom’s book makes a case against empathy as an inherent force for good and takes a closer look at what empathy is (and is not), how empathy works in our brains, how empathy can lead to immoral outcomes despite our best intentions, and how we can improve our ability to have a positive impact by strengthening our intelligence, compassion, self-control, and ability to reason.

To explore these questions, we first need to define what we’re talking about.

What Is Empathy?

Empathy is an often-used word that can mean different things. Bloom quotes one team of empathy researchers who joke that “there are probably nearly as many definitions of empathy as people working on this topic.” For his part, Bloom defines empathy as “the act of coming to experience the world as you think someone else does.” This type of empathy was explored by philosophers of the Scottish Enlightenment. Bloom writes:

As Adam Smith put it, we have the capacity to think about another person and “place ourselves in his situation and become in some measure the same person with him, and thence form some idea of his sensations, and even feel something which, though weaker in degree, is not altogether unlike them.”

This is the definition and view of empathy that Bloom devotes most of the book to exploring. This is the “standing in another man’s shoes” type of empathy from Barack Obama’s quote above, which Bloom calls emotional empathy.

“I feel your pain” is more than a metaphor. It's literal.

With emotional empathy, you actually experience a weaker degree of what somebody else feels. Researchers in recent years have been able to show that empathic responses of pain occur in the same area of the brain where real pain is experienced.

So “I feel your pain” isn’t just a gooey metaphor; it can be made neurologically literal: Other people’s pain really does activate the same brain area as your own pain, and more generally, there is neural evidence for a correspondence between self and other.

To make the shoe metaphor literal, imagine that you see somebody drop something heavy on their foot — you flinch because you know what this feels like and the parts of your brain that experience pain (the anterior insula and the cingulate cortex) react. You don’t feel the same degree of pain, of course — you didn’t drop anything on your foot after all — but it is likely that you have an involuntary physical reaction like a flinch, a facial grimace, or an audible outburst. This is an emotionally empathic response.

But there is another form of empathy that Bloom wants us to be aware of and consider differently. It relates to our ability to understand what is going on in the minds of others. Bloom refers to this form as cognitive empathy:

… if I understand that you are in pain without feeling it myself, this is what psychologists describe as social cognition, social intelligence, mind reading, theory of mind, or mentalizing. It's also sometimes described as a form of empathy—“cognitive empathy” as opposed to “emotional empathy.”

In this sense, cognitive empathy speaks to our capacity to understand what is going on in the minds of others. In the case of pain, which is where a lot of empathy research is done, we’re not talking about feeling any degree of pain, as we might with emotional empathy, but instead, we simply understand that the other person is feeling pain without feeling it ourselves. Cognitive empathy goes beyond pain — our ability to understand what is going on in somebody else’s mind is an important part of being human and is necessary for us to relate to each other.

Empathy and compassion are synonyms in many dictionaries and used interchangeably by many, but they have different characteristics.

The brain is, of course, very complicated, so it is plausible that these two types of empathy could take place in the same part of the brain. So far, though, the research seems to indicate that they are largely separate:

In a review article, Jamil Zaki and Kevin Ochsner note that hundreds of studies now support a certain perspective on the mind, which they call “a tale of two systems.” One system involves sharing the experience of others, what we’ve called empathy; the other involves inferences about the mental states of others—mentalizing or mind reading. While they can both be active at once, and often are, they occupy different parts of the brain. For instance, the medial prefrontal cortex, just behind the forehead, is involved in mentalizing, while the anterior cingulate cortex, sitting right behind that, is involved in empathy.

The difference between cognitive and emotional empathy is important for understanding Bloom’s arguments. From Bloom’s perspective, cognitive empathy is “…a useful and necessary tool for anyone who wishes to be a good person—but it is morally neutral.” On the other hand, Bloom believes that emotional empathy is “morally corrosive,” and the bulk of his attack is directed at highlighting the pitfalls of relying on emotional empathy while making the case for cultivating and practicing “rational compassion” instead.

I believe that the capacity for emotional empathy, described as “sympathy” by philosophers such as Adam Smith and David Hume, often simply known as “empathy” and defended by so many scholars, theologians, educators, and politicians, is actually morally corrosive. If you are struggling with a moral decision and find yourself trying to feel someone else’s pain or pleasure, you should stop. This empathic engagement might give you some satisfaction, but it’s not how to improve things and can lead to bad decisions and bad outcomes. Much better to use reason and cost-benefit analysis, drawing on a more distanced compassion and kindness.

Here again, the definition of the terms is important for understanding the argument. Empathy and compassion are synonyms in many dictionaries and used interchangeably by many, but they have different characteristics. Bloom outlines the difference:

… compassion and concern are more diffuse than empathy. It is weird to talk about having empathy for the millions of victims of malaria, say, but perfectly normal to say that you are concerned about them or feel compassion for them. Also, compassion and concern don’t require mirroring of others’ feelings. If someone works to help the victims of torture and does so with energy and good cheer, it doesn’t seem right to say that as they do this, they are empathizing with the individuals they are helping. Better to say that they feel compassion for them.

Bloom references a review paper written by Tania Singer and Olga Klimecki to help make the distinction clear. Singer and Klimecki write:

In contrast to empathy, compassion does not mean sharing the suffering of the other: rather, it is characterized by feelings of warmth, concern and care for the other, as well as a strong motivation to improve the other’s well-being. Compassion is feeling for and not feeling with the other.

To summarize, emotional empathy could be simply described as “feeling what others feel,” cognitive empathy as “understanding what others feel,” and compassion as “caring about how others feel.”

Emotional empathy could be simply described as “feeling what others feel,” cognitive empathy as “understanding what others feel,” and compassion as “caring about how others feel.”

Empathy and Morality

Many people believe that our ability to empathize is the basis for morality because it causes us to consider our actions from another’s perspective. “Treat others as you would like to be treated” is the basic morality lesson repeated thousands of times to children all over the world.

In this way, empathy can lead us to rely on our self-centered nature. If this is true, Bloom suggests that the argument in its simplest form would go like this:

Everyone is naturally interested in him- or herself; we care most about our own pleasure and pain. It requires nothing special to yank one’s hand away from a flame or to reach for a glass of water when thirsty. But empathy makes the experiences of others salient and important—your pain becomes my pain, your thirst becomes my thirst, and so I rescue you from the fire or give you something to drink. Empathy guides us to treat others as we treat ourselves and hence expands our selfish concerns to encompass others.

In this way, the willful exercise of empathy can motivate kindness that would never have otherwise occurred. Empathy can make us care about a slave, or a homeless person, or someone in solitary confinement. It can put us into the mind of a gay teenager bullied by his peers, or a victim of rape. We can empathize with a member of a despised minority or someone suffering from religious persecution in a faraway land. All these experiences are alien to me, but through the exercise of empathy, I can, in some limited way, experience them myself, and this makes me a better person.

When we consider the plight of others by imagining ourselves in their situation, we experience an empathic response that can cause us to evaluate the morality of our actions.

When we consider the plight of others by imagining ourselves in their situation, we experience an empathic response that can cause us to evaluate the morality of our actions.

In an interview, Steven Pinker hypothesizes that it was an increase in empathy, made possible by the technology of the printing press and the resulting increase in literacy, that led to the Humanitarian Revolution during the Enlightenment. The increase in empathy brought about by our ability to read accounts of violent punishments like disembowelment and mutilation caused us to reconsider the morality of treating other human beings in such ways.

So in certain instances, empathy can play a role in motivating us to take moral action. But is an empathic response required to do so?

To use a classic example from philosophy—first thought up by the Chinese philosopher Mencius—imagine that you are walking by a lake and see a young child struggling in shallow water. If you can easily wade into the water and save her, you should do it. It would be wrong to keep walking.

What motivates this good act? It is possible, I suppose, that you might imagine what it feels like to be drowning, or anticipate what it would be like to be the child’s mother or father hearing that she drowned. Such empathic feelings could then motivate you to act. But that is hardly necessary. You don’t need empathy to realize that it’s wrong to let a child drown. Any normal person would just wade in and scoop up the child, without bothering with any of this empathic hoo-ha.

And so there has to be more to morality than empathy. Our decisions about what’s right and what’s wrong, and our motivations to act, have many sources. One’s morality can be rooted in a religious worldview or a philosophical one. It can be motivated by a more diffuse concern for the fates of others—something often described as concern or compassion…

I hope most people reading this would agree that failing to attempt to save a drowning child or supporting or perpetrating violent punishments like disembowelment would be at the very least morally reprehensible, if not outright evil.

But what motivates people to be “evil”? For researchers like Simon Baron-Cohen, evil is defined as “empathy erosion” — truly evil people lack the capacity to empathize, and it is this lack of empathy that causes them to act in evil ways. Bloom looks at the question of what causes people to be evil from a slightly different angle:

Indeed, some argue that the myth of pure evil gets things backward. That is, it’s not that certain cruel actions are committed because the perpetrators are self-consciously and deliberatively evil. Rather it is because they think they are doing good. They are fueled by a strong moral sense.

When the perpetrators of violence or cruelty believe that their actions are morally justified, what motivates them? Bloom suggests that it can be empathy. Empathy often causes us to choose sides, to choose whom to empathize with. We see this tendency play out in politics all the time.

Empathy often causes us to choose sides, to choose whom to empathize with.

Politicians representing one side believe they are saving the world, while representatives on the other side believe that their adversaries are out to destroy civilization as we know it. If I believe that I am protecting a person or group of people whom I choose to empathize with, then I may be motivated to act in a way I believe is morally justified, even though others may believe that I have harmed them.

Steven Pinker weighed in on this issue when he wrote the following in The Better Angels of our Nature:

If you added up all the homicides committed in pursuit of self-help justice, the casualties of religious and revolutionary wars, the people executed for victimless crimes and misdemeanors, and the targets of ideological genocides, they would surely outnumber the fatalities from amoral predation and conquest.

Bloom quotes Pinker and goes on to write:

Henry Adams put this in stronger terms, with regard to Robert E. Lee: “It's always the good men who do the most harm in the world.”

This might seem perverse. How can good lead to evil? One thing to keep in mind here is that we are interested in beliefs and motivations, not what’s good in some objective sense. So the idea isn’t that evil is good; rather, it’s that evil is done by those who think they are doing good.

So from a moral perspective, empathy can lead us astray. We may believe we are doing good or that our actions are justified but this may not necessarily be true for all involved. This is especially troublesome when we consider how we are affected by a growing list of cognitive biases.

Empathy and Biases

While empathy may not be required to motivate us to save a drowning child, it can still help us consider the differing experiences or suffering of another person thus motivating us to consider things from their perspective or thus act to relieve their suffering:

I see the bullied teenager and might be tempted initially to join in with his tormenters, out of sadism or boredom or a desire to dominate or be popular, but then I empathize—I feel his pain, I feel what it’s like to be bullied—so I don’t add to his suffering. Maybe I even rise to his defense. Empathy is like a spotlight directing attention and aid to where it’s needed.

On the surface this seems like an excellent case for the positive power of empathy; it shines a “spotlight” on a person in need and motivates us to help them. But what happens when we dig a little deeper into this metaphor? Bloom writes

… spotlights have a narrow focus, and this is one problem with empathy. It does poorly in a world where there are many people in need and where the effects of one’s actions are diffuse, often delayed, and difficult to compute, a world in which an act that helps one person in the here and now can lead to greater suffering in the future.

He adds:

Further, spotlights only illuminate what they are pointed at, so empathy reflects our biases. Although we might intellectually believe that the suffering of our neighbor is just as awful as the suffering of someone living in another country, it’s far easier to empathize with those who are close to us, those who are similar to us, and those we see as more attractive or vulnerable and less scary. Intellectually, a white American might believe that a black person matters just as much as a white person, but he or she will typically find it a lot easier to empathize with the plight of the latter than the former. In this regard, empathy distorts our moral judgments in pretty much the same way that prejudice does.

We are all predisposed to care more deeply for those we are close to. From a purely biological perspective, we will care for and protect our children and families before the children or families of strangers. Our decision making often falls victim to narrow framing, and our actions are affected by biases like Liking/Loving and Disliking/Hating and our tendency to discount the pain of people we don’t like:

We are constituted to favor our friends and family over strangers, to care more about members of our own group than people from different, perhaps opposing, groups. This fact about human nature is inevitable given our evolutionary history. Any creature that didn’t have special sentiments toward those that shared its genes and helped it in the past would get its ass kicked from a Darwinian perspective; it would falter relative to competitors with more parochial natures. This bias to favor those close to us is general—it influences who we readily empathize with, but it also influences who we like, who we tend to care for, who we will affiliate with, who we will punish, and so on.

There are many causes for human biases — empathy is only one — but taking a step back, we can see how the intuitive gut responses motivated by emotional empathy can negatively affect our ability to make rational decisions.

Empathy’s narrow focus, specificity, and innumeracy mean that it’s always going to be influenced by what captures our attention, by racial preferences, and so on. It’s only when we escape from empathy and rely instead on the application of rules and principles or a calculation of costs and benefits that we can, to at least some extent, become fair and impartial.

While many of us are motivated to be good and to make good decisions, it isn’t always cut and dry. Our preferences for whom to help or which organizations to support are affected by our biases. If we’re not careful, empathy can affect our ability to see the potential impacts of our actions. However, considering these impacts takes much more than empathy and a desire to do good; it takes awareness of our biases and mental effort to combat their effects:

… doing actual good, instead of doing what feels good, requires dealing with complex issues and being mindful of exploitation from competing, sometimes malicious and greedy, interests. To do so, you need to step back and not fall into empathy traps. The conclusion is not that one shouldn’t give, but rather that one should give intelligently, with an eye toward consequences.

In addition to biases like Liking/Loving and Disliking/Hating, empathy can lead to biases related to the Representative Heuristic. Actions motivated by empathy often fail to take the broader picture into account; the spotlight doesn’t encourage us to consider base rates or sample size when we make our decisions. Instead, we are motivated by positive emotions for a specific individual or small group:

Empathy is limited as well in that it focuses on specific individuals. Its spotlight nature renders it innumerate and myopic: It doesn’t resonate properly to the effects of our actions on groups of people, and it is insensitive to statistical data and estimated costs and benefits.

Part of the challenge that exists with empathy is this innumeracy that Bloom describes. It is impossible for us to form genuine empathic connections with abstractions. Conversely, if we see the suffering of one, empathy can motivate us to help make it stop. As Mother Theresa said, “If I look at the mass, I will never act. If I look at the one, I will.” This is what psychologists call “the identifiable victim effect.”

While many of us are motivated to be good and to make good decisions, it isn’t always cut and dry.

Perhaps an example will help illustrate.  On October 17, 1987, 18-month-old Jessica McClure fell 22 feet down an eight-inch-diameter well in the backyard of her home in Midland, Texas. Over the next 2 ½ days, fire, police, and volunteer rescuers worked around the clock to save her. Media coverage of the emergency was broadcast all over the world resulting in Jessica McClure becoming internationally known as “Baby Jessica” and prompting then-President Ronald Reagan to proclaim that “…everybody in America became the godmothers and godfathers of Jessica while this was going on.” The intense coverage and global awareness led to an influx of donations, resulting in an $800,000 trust being established in Jessica’s name.

What prompted this massive outpouring of concern and support? There are millions of children in need every day all over the world. How many of the people who sent donations to Baby Jessica had ever tried to help these faceless children? In the case of Baby Jessica, they had an identifiable victim, and empathy motivated many of them to help Jessica and her family. They could imagine what it might feel like for those poor parents and they felt genuine concern for the child’s future; all the other needy children around the world were statistical abstractions. This ability to identify and put a face on the suffering child and their family enables us to experience an empathic response with them, but the random children and their families remain empathically out of reach.

None of this is to say that rescuers should not have worked to save Jessica McClure — she was a real-world example of Mencius’s proverbial drowning child — but there are situations every day where we choose to help individuals at the cost of the continued suffering of others. Our actions often have diffuse and unknowable impacts.

If our concern is driven by thoughts of the suffering of specific individuals, then it sets up a perverse situation in which the suffering of one can matter more than the suffering of a thousand.

Furthermore, not only are we more likely to empathize with the identifiable victim, our empathy has its limits in scale as well. If we hear that an individual in a faraway land is suffering, we may have an empathic response, but will that response be increased proportionally if we learned that thousands or millions of people suffered? Adam Smith got to the heart of this question in The Theory of Moral Sentiments when he wrote:

Let us suppose that the great empire of China, with all its myriads of inhabitants, was suddenly swallowed up by an earthquake, and let us consider how a man of humanity in Europe, who had no sort of connection with that part of the world, would be affected upon receiving intelligence of this dreadful calamity. He would, I imagine, first of all, express very strongly his sorrow for the misfortune of that unhappy people, he would make many melancholy reflections upon the precariousness of human life, and the vanity of all the labors of man, which could thus be annihilated in a moment. He would too, perhaps, if he was a man of speculation, enter into many reasonings concerning the effects which this disaster might produce upon the commerce of Europe, and the trade and business of the world in general. And when all this fine philosophy was over, when all these humane sentiments had been once fairly expressed, he would pursue his business or his pleasure, take his repose or his diversion, with the same ease and tranquility, as if no such accident had happened.

Empathy can inadvertently motivate us to act to save the one at the expense of the many. While the examples provided are by no means clear-cut issues, it is worth considering how the morality or goodness of our actions to help the few may have negative consequences for the many.

Charlie Munger has written and spoken about the Kantian Fairness Tendency, in which he suggests that for certain systems to be moral to the many, they must be unfair to the few.

For certain systems to be moral to the many, they must be unfair to the few.

Empathy and Reason

We are emotional creatures, then, but we are also rational beings, with the capacity for rational decision-making. We can override, deflect, and overrule our passions, and we often should do so. It’s not hard to see this for feelings like anger and hate—it’s clear that these can lead us astray, that we do better when they don’t rule us and when we are capable of circumventing them.

While we need kindness and compassion and we should strive to be good people making good decisions, we are not necessarily well served by empathy in this regard; emotional empathy’s negatives often outweigh its positives. Instead, we should rely on our capacity to reason and control our emotions. Empathy is not something that can be removed or ignored; it is a normal function of our brains after all, but we can and do combine reason with our natural instincts and intuitions:

The idea that human nature has two opposing facets—emotion versus reason, gut feelings versus careful, rational deliberation—is the oldest and most resilient psychological theory of all. It was there in Plato, and it is now the core of the textbook account of cognitive processes, which assumes a dichotomy between “hot” and “cold” mental processes, between an intuitive “System 1” and a deliberative “System 2.”

We know from Daniel Kahneman’s Thinking, Fast and Slow that these two systems are not inherently separate in practice. They are both functioning in our brains at the same time.

Some decisions are made faster due to heuristics and intuitions from experiences or our biology, while other decisions are made in a more deliberative and slow fashion using reason. Bloom writes:

We go through a mental process that is typically called “choice,” where we think about the consequences of our actions. There is nothing magical about this. The neural basis of mental life is fully compatible with the existence of conscious deliberation and rational thought—with neural systems that analyze different options, construct logical chains of argument, reason through examples and analogies, and respond to the anticipated consequences of actions.

We have an impulsive, emotional, and intuitive decision-making system in System 1 and a deliberative, reasoning, and (sometimes) rational decision-making system in System 2.

We will always have emotional reactions, but on average our decision making will be better served by improving our ability to reason rather than leveraging our ability to empathize

We will always have emotional reactions, but on average our decision making will be better served by improving our ability to reason rather than by leveraging our ability to empathize. One way to increase our ability to reason is to focus on improving our self-control:

Self-control can be seen as the purest embodiment of rationality in that it reflects the working of a brain system (embedded in the frontal lobe, the part of the brain that lies behind the forehead) that restrains our impulsive, irrational, or emotive desires.

While Bloom is unabashedly against empathy as an inherent force for good in the world, he is also a firm supporter of being and doing good. He believes that the “feeling with” nature of emotional empathy leads us to make biased and bad decisions despite our best intentions and that we should instead foster and encourage the “caring for” nature of compassion while combining it with our intelligence, self-control, and ability to reason:

… none of this is to deny the importance of traits such as compassion and kindness. We want to nurture these traits in our children and work to establish a culture that prizes and rewards them. But they are not enough. To make the world a better place, we would also want to bless people with more smarts and more self-control. These are central to leading a successful and happy life—and a good and moral one.

 

[Editor's note: Where you see boldface in block quotes, emphasis has been added by Farnam Street.]

The Chessboard Fallacy

“In the great chess-board of human society,
every single piece has a principle of motion of its own.”
— Adam Smith

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One of our favorite dictums, much referenced here, is an idea by Joseph Tussman, about getting the world to do the work for you:

“What the pupil must learn, if he learns anything at all, is that the world will do most of the work for you, provided you cooperate with it by identifying how it really works and aligning with those realities. If we do not let the world teach us, it teaches us a lesson.”

By aligning with the world, as it really is and not as we wish it to be, we get it to do the work for us.

Tussman's idea has at least one predecessor: Adam Smith.

In The Theory of Moral Sentiments, Smith excoriates the “Men of System” who have decided on an inflexible ideology of how the world should work, and try to fit the societies they lead into a Procrustean Bed of their choosing — the Mao Zedong-type leaders who would allow millions to die rather than sacrifice an inch of ideology (although Smith's book predates Maoism by almost 200 years).

In his great wisdom, Smith perfectly explains the futility of swimming “against the tide” of how the world really works and the benefit of going “with the tide” whenever possible. He recognizes that people are not chess pieces, to be moved around as desired.

Instead, he encourages us to remember that everyone we deal with has their own goals, feelings, aspirations, and motivations, many of them not always immediately obvious. We must construct human systems with human nature in full view, fully harnessed, fully acknowledged.

Any system of human relations that doesn't accept this truth will always be fighting the world, rather than getting it to work for them.

The man of system, on the contrary, is apt to be very wise in his own conceit; and is often so enamored with the supposed beauty of his own ideal plan of government, that he cannot suffer the smallest deviation from any part of it. He goes on to establish it completely and in all its parts, without any regard either to the great interests, or to the strong prejudices which may oppose it.

He seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board. He does not consider that the pieces upon the chess-board have no other principle of motion besides that which the hand impresses upon them; but that, in the great chess-board of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might choose to impress upon it.

If those two principles coincide and act in the same direction, the game of human society will go on easily and harmoniously, and is very likely to be happy and successful. If they are opposite or different, the game will go on miserably, and the society must be at all times in the highest degree of disorder.

Think of how many policies, procedures and systems of organization which forget this basic truth; systems of political control, price control, social control and behavioral control — from bad workplaces to bad governments – which have failed so miserably because they refused to account for the underlying motivations of the people in the system, and failed to do a second-step analysis of the consequences of their policies.

It's just as true in personal relations: How often do we fail to treat others correctly because we haven't taken their point of view, motivations, aspirations, and desires properly into account? How often is our own “system of relations” built on faulty assumptions that don't actually work for us? (The old marriage advice “You can either be right, or be happy” is pure gold wisdom in this sense.)

Smith's counsel offers us a nice out, though. If our own system for dealing with people and their own “principles of motion” are the same, then we are likely to get a harmonious result! If not? We get misery.

The choice is ours.

A Parable of Contentment and Happiness

“Who is rich?
He who is satisfied with his lot.”
— Ben Zoma

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A short parable on contentment today, from Plutarch's Life of Pyrrhus, one of a series of biographies by the great Greek historian Plutarch that were later collected as Plutarch's Lives.

Pyrrhus was the King of Epirus, a region of Greece. As he lays out his plan for a conquest of Rome, his advisor Cineas decides to take a step back and help Pyrrhus see himself in a mirror — to do a second-step analysis of his goals. Contained in that conversation is a great deal of wisdom about life. We suggest thinking deeply about what it means for your own.

“The Romans, sir, are reported to be great warriors and conquerors of many warlike nations; if God permit us to overcome them, how should we use our victory?”

“You ask,” said Pyrrhus, “a thing evident of itself. The Romans once conquered, there is neither Greek nor barbarian city that will resist us, but we shall presently be masters of all Italy, the extent and resources and strength of which any one should rather profess to be ignorant of than yourself.”

Cineas after a little pause, “And having subdued Italy, what shall we do next?”

Pyrrhus not yet discovering his intention, “Sicily,” he replied, “next holds out her arms to receive us, a wealthy and populous island, and easy to be gained; for since Agathocles left it, only faction and anarchy, and the licentious violence of the demagogues prevail.”

“You speak,” said Cineas, “what is perfectly probable, but will the possession of Sicily put an end to the war?”

“God grant us,” answered Pyrrhus, “victory and success in that, and we will use these as forerunners of greater things; who could forbear from Libya and Carthage then within reach, which Agathocles, even when forced to fly from Syracuse, and passing the sea only with a few ships, had all but surprised? These conquests once perfected, will any assert that of the enemies who now pretend to despise us, any one will dare to make further resistance?”

“None,” replied Cineas, “for then it is manifest we may with such mighty forces regain Macedon, and make an absolute conquest of Greece; and when all these are in our power what shall we do then?”

Said Pyrrhus, smiling, “We will live at our ease, my dear friend, and drink all day, and divert ourselves with pleasant conversation.”

When Cineas had led Pyrrhus with his argument to this point: “And what hinders us now, sir, if we have a mind to be merry, and entertain one another, since we have at hand without trouble all those necessary things, to which through much blood and great labour, and infinite hazards and mischief done to ourselves and to others, we design at last to arrive?”

Cineas is saying, in so many words: Why go to all the trouble of trying to own the world when you can be happy and content right now? Unfortunately, Pyrrhus fails to heed the advice.

The great Scot Adam Smith, after recounting the above story in his Theory of Moral Sentiments, uses it as a way to remind us to be very careful with our continual discontentment:

The great source of both the misery and disorders of human life, seems to arise from over-rating the difference between one permanent situation and another. Avarice over-rates the difference between poverty and riches: ambition, that between a private and a public station: vain-glory, that between obscurity and extensive reputation. The person under the influence of any of those extravagant passions, is not only miserable in his actual situation, but is often disposed to disturb the peace of society, in order to arrive at that which he so foolishly admires.

The slightest observation, however, might satisfy him, that, in all the ordinary situations of human life, a well-disposed mind may be equally calm, equally cheerful, and equally contented. Some of those situations may, no doubt, deserve to be preferred to others: but none of them can deserve to be pursued with that passionate ardour which drives us to violate the rules either of prudence or of justice; or to corrupt the future tranquillity of our minds, either by shame from the remembrance of our own folly, or by remorse from the horror of our own injustice.

Wherever prudence does not direct, wherever justice does not permit, the attempt to change our situation, the man who does attempt it, plays at the most Unequal of all games of hazard, and stakes every thing against scarce any thing.

(H/T to the economist and interviewer Russ Roberts for pointing out this wonderful parable in his magnificent short book How Adam Smith Can Change Your Life.)

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Still Interested? Check out some other thoughts on human happiness.

Warren Buffett: The Inner Scorecard

“The big question about how people behave is whether they've got an Inner Scorecard or an Outer Scorecard. It helps if you can be satisfied with an Inner Scorecard.”
— Warren Buffett

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Human beings are, in large part, driven by the admiration of their peers.

We seek to satisfy a deep biological need by acting in such a way that we feel praise and adulation; for our wealth, our success, our skills, our looks. It could be anything. The trait we are admired for matters less than the admiration itself. The admiration is the token we dance for. We feel envy when others are getting more tokens than us, and we pity ourselves when we're not getting any.

There's nothing inherently wrong with this. The pursuit of (deserved) admiration causes us to drive and accomplish. It's a part of the explanation for why the human world has moved along so far from where it started — we're willing to do extraordinary things that are extraordinarily difficult, like starting a company from scratch, inventing a new and better product, solving some ridiculously complicated theorem, or conquering unknown territory.

This is all well and good.

The problems come when we start compromising our own standards, those we have set for ourselves, in order to earn admiration. False, undeserved admiration.

Warren Buffett frequently relates an interesting way to frame this problem. From Alice Schroeder's Buffett biography The Snowball:

Lookit. Would you rather be the world’s greatest lover, but have everyone think you’re the world’s worst lover? Or would you rather be the world’s worst lover but have everyone think you’re the world’s greatest lover? Now, that’s an interesting question. “Here’s another one. If the world couldn’t see your results, would you rather be thought of as the world’s greatest investor but in reality have the world’s worst record? Or be thought of as the world’s worst investor when you were actually the best?

Buffett's getting at a rather fundamental model he's used most of his life: The Inner Scorecard. It's a major reason Buffett has stayed so successful for so long, with so little failure or scandal intervening: While most are are “checking the official time,” Buffett is setting his watch by an internal clock!

The investor Guy Spier once won a charity lunch with Buffett, and related his experience in a book called The Education of a Value Investor. He immediately recognized Buffett's lack of falseness:

One of Buffett’s defining characteristics is that he so clearly lives by his own inner scorecard. It isn’t just that he does what’s right, but that he does what’s right for him. As I saw during our lunch, there’s nothing fake or forced about him. He sees no reason to compromise his standards or violate his beliefs. Indeed, he has told Berkshire’s shareholders that there are things he could do that would make the company bigger and more profitable, but he’s not prepared to do them. For example, he resists laying people off or selling holdings that he could easily replace with more profitable businesses. Likewise, some investors have complained that Berkshire would be much more profitable if he’d moved its tax domicile to Bermuda as many other insurers have done. But Buffett doesn’t want to base his company in Bermuda even though it would be legal and would have saved tens of billions in taxes.

We don't, by the way, claim Buffett has an unblemished record. That would not be accurate. But it does seem that his record is far more spotless than others who have climbed as far as he has.

If Buffett was “setting his clock externally” — living by the standards of others — he would not have been able to maintain the independence of mind that led him to avoid a number of financial bubbles and tremendous personal misery.

What Buffett and a lot of other people who have been successful in life — true success, not money — have in common is that they're able to remember what we all set out to do: live a fulfilling life! Not get rich. Not get famous. Not even get admiration, necessarily. But to live a satisfying existence and help others around them do the same.

It's not that getting rich or famous or admired can't be deeply satisfying. It can be! I'm positive Buffett deeply enjoys his wealth and status. He's got more “admiration tokens” than almost anyone in the world.

But all of that can be ruined very, very easily along the way by making too many compromises, by living according to an external scorecard rather than an internal one. How many stories have you heard of famous and/or wealthy folks becoming entrapped in constant lawsuits, bickering, loneliness, and pure unhappiness? A countless number, right?

Bernie Madoff achieved great admiration and wealth, but was he happy? He made it clear, after he'd been caught, that he wasn't. Here was a guy who had all the admiration tokens in the world, an External Scorecard showing an A+, and what happened when he lost it all? He felt relieved.

So, did fame or wealth actually work in giving him a satisfying and fulfilling life? No!

The little mental trick is to remember that success, money, fame, and beauty, all the things we pursue, are merely the numeratorIf the denominator — shame, regret, unhappiness, loneliness — is too large, our “Life Satisfaction Score” ends up being tiny, worthless. Even if we have all that good stuff!

Nassim Taleb once related a very similar idea:

The optimal solution to being independent and upright while remaining a social animal is: to seek first your own self-respect and, secondarily and conditionally, that of others, provided your external image does not conflict with your own self-respect. Most people get it backwards and seek the admiration of the collective and something called “a good reputation” at the expense of self-worth for, alas, the two are in frequent conflict under modernity.

It's so simple. This is why you see people that “should be happy” who are not. Big denominators destroy self-worth.

***

Adam Smith addressed this issue similarly about 225 years ago in his lesser known, though equally useful book The Theory of Moral Sentiments. Here's how he put it:

Man naturally desires, not only to be loved, but to be lovely; or to be that thing which is the natural and proper object of love. He naturally dreads, not only to be hated, but to be hateful; or to be that thing which is the natural and proper object of hatred. He desires, not only praise, but praiseworthiness; or to be that thing which, though it should be praised by nobody, is, however, the natural and proper object of praise. He dreads, not only blame, but blame-worthiness; or to be that thing which, though it should be blamed by nobody, is, however, the natural and proper object of blame.

To Smith, happiness was a combination of being loved and lovely: In modern terms, his wording makes it sound like he means “loved by others and also beautiful.”

But as you read on, you see that's not what he meant. He adds “Hated, but hateful.” “Praise, but praiseworthiness.” “Blame, but blame-worthiness.”

He's saying we're only happy if we're successful by an Inner Scorecard! We can't just earn praise, we must be praiseworthy. We can't just be loved, we must be loveable. It makes all the difference in the world. Our dissatisfaction with ourselves will always trump the satisfaction we feel with false rewards. We must, as Charlie Munger puts itearn and deserve the success we desire.

There's a simple word for this: Authenticity. We seek it, and we're only happy when we feel we've achieved it. It can't be faked. And the way to get there is to remember the Inner Scorecard and start grading yourself accordingly.

The Darwin Economy – Why Smith’s Invisible Hand Breaks Down

The Darwin Economy

In The Darwin Economy: Liberty, Competition, and The Common Good Robert H. Frank, an economics professor at Cornell's Johnson Graduate School of Management, takes on the debate of who was a better economist—Adam Smith or Charles Darwin. Frank, surprisingly, sides with Darwin, arguing that within the next century Darwin will unseat Smith as the intellectual founder of economics.

Why does the invisible hand, “which says that competition challenges self-interest for the common good” break down?

Without question, Adam Smith's invisible hand was a genuinely ground breaking insight. Producers rush to introduce improved product designs and cost-saving innovations for the sole purpose of capturing market share and profits from their rivals. In the short run, these steps work just as the producers had hoped. But rival firms are quick to mimic the innovations, and the resulting competition quickly causes prices to fall in line with the new, lower costs. In the end, Smith argued, consumers are the ultimate beneficiaries of all this churning.

But many of Smith's modern disciples believe he made the much bolder claim that markets always harness individual self-interest to produce the greatest good for society as a whole. Smith's own account, however, was far more circumspect. He wrote, for example, that the profit-seeking business owner “intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was not part of it [emphasis added].”

Smith never believed that the invisible hand guaranteed good outcomes in all circumstances. His skepticism was on full display, for example, when he wrote, “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.” To him, what was remarkable was that self-interested actions often led to socially benign outcomes.

Like Smith, modern progressive critics of the market system tend to attribute its failings to conspiracies to restrain competition. But competition was much more easily restrained in Smith's day than it is now. The real challenge to the invisible hand is rooted in the very logic of the competitive process itself.

Charles Darwin was one of the first to perceive the underlying problem clearly. One of his central insights was that natural selection favors traits and behaviors primarily according to their effect on individual organisms, not larger groups. Sometimes individual and group interests coincide, he recognized, and in such cases we often get invisible hand-like results. A mutation that codes for keener eyesight in one particular hawk, for example, serves the interests of that individual, but its inevitable spread also makes hawks as a species more successful.

In other cases, however, mutations that help the individual prove quite harmful to the larger group. This is in fact the expected result for mutations that confer advantage in head-to-head competition among members of the same species. Male body mass is a case in point. Most vertebrate species are polygynous, meaning that males take more than one mate if they can. The qualifier is important, because when some take multiple mates, others get none. The latter don't pass their genes along, making them the ultimate losers in Darwinian terms. So it's no surprise that males often battle furiously for access to mates. Size matters in those battles, and hence the evolutionary arms races that produce larger males.

Elephant seals are an extreme but instructive example.10 Bulls of the species often weigh almost six thousand pounds, more than five times as much as females and almost as much as a Lincoln Navigator SUV. During the mating season, pairs of mature bulls battle one another ferociously for hours on end, until one finally trudges off in defeat, bloodied and exhausted. The victor claims near-exclusive sexual access to a harem that may number as many as a hundred cows. But while being larger than his rival makes an individual bull more likely to prevail in such battles, prodigious size is a clear handicap for bulls as a group, making them far more vulnerable to sharks and other predators.

Given an opportunity to vote on a proposal to reduce every animal's weight by half, bulls would have every reason to favor it. Since it's relative size, not absolute size, that matters in battle, the change would not affect the outcome of any given head-to-head contest, but it would reduce each animal's risk of being eaten by sharks. There's no practical way, of course, that elephant seals could implement such a proposal. Nor could any bull solve this problem unilaterally, since a bull that weighed much less than others would never win a mate.

Similar conflicts pervade human interactions when individual rewards depend on relative performance. Their essence is nicely captured in a celebrated example by the economist Thomas Schelling. Schelling noted that hockey players who are free to choose for themselves invariably skate without helmets, yet when they're permitted to vote on the matter, they support rules that require them. If helmets are so great, he wondered, why don't players just wear them? Why do they need a rule?

His answer began with the observation that skating without a helmet confers a small competitive edge—perhaps by enabling players to see or hear a little better, or perhaps by enabling them to intimidate their opponents. The immediate lure of gaining a competitive edge trumps more abstract concerns about the possibility of injury, so players eagerly embrace the additional risk. The rub, of course, is that when every player skates without a helmet, no one gains a competitive advantage—hence the attraction of the rule.

As Schelling's diagnosis makes clear, the problem confronting hockey players has nothing to do with imperfect information, lack of self-control, or poor cognitive skills—shortcomings that are often cited as grounds for government intervention. And it clearly does not stem from exploitation or any insufficiency of competition. Rather, it's a garden-variety collective action problem. Players favor helmet rules because that's the only way they're able to play under reasonably safe conditions. A simple nudge—say, a sign in the locker room reminding players that helmets reduce the risk of serious injury—just won't solve their problem. They need a mandate.

What about the libertarians' complaint that helmet rules deprive individuals of the right to choose? This objection is akin to objecting that a military arms control agreement robs the signatories of their right to choose for themselves how much to spend on bombs. Of course, but that's the whole point of such agreements! Parties who confront a collective action problem often realize that the only way to get what they want is to constrain their own ability to do as they please.

As John Stuart Mill argued in On Liberty, it's permissible to constrain an individual's freedom of action only when there's no less intrusive way to prevent undue harm to others. The hockey helmet rule appears to meet this test. By skating without a helmet, a player imposes harm on rival players by making them less likely to win the game, an outcome that really matters to them. If the helmet rule itself somehow imposed even greater harm, it wouldn't be justified. But that's a simple practical question, not a matter of deep philosophical principle.

Rewards that depend on relative performance spawn collective action problems that can cause markets to fail. For instance, the same wedge that separates individual and group interests in Darwinian arms races also helps explain why the invisible hand might not automatically lead to the best possible levels of safety in the workplace. The traditional invisible-hand account begins with the observation that, all other factors the same, riskier jobs tend to pay more, for two reasons. Because of the money employers save by not installing additional safety equipment, they can pay more; and because workers like safety, they will choose safer jobs unless riskier jobs do, in fact, pay more. According to the standard invisible-hand narrative, the fact that a worker is willing to accept lower safety for higher wages implies that the extra income was sufficient compensation for the decrement in safety. But that account rests on the assumption that extra income is valued only for the additional absolute consumption it makes possible. When a worker gets a higher wage, however, there is also a second important benefit. He is able to consume more in absolute terms, yes—but he is also able to consume more relative to others.

Most parents, for example, want to send their children to the best possible schools. Some workers might thus decide to accept a riskier job at a higher wage because that would enable them to meet the monthly payments on a house in a better school district. But other workers are in the same boat, and school quality is an inherently relative concept. So if other workers also traded safety for higher wages, the ultimate outcome would be merely to bid up the prices of houses in better school districts. Everyone would end up with less safety, yet no one would achieve the goal that made that trade seem acceptable in the first place. As in a military arms race, when all parties build more arms, none is any more secure than before.

Workers confronting these incentives might well prefer an alternative state of the world in which all enjoyed greater safety, even at the expense of all having lower wages. But workers can control only their own job choices, not the choices of others. If any individual worker accepted a safer job while others didn't, that worker would be forced to send her children to inferior schools. To get the outcome they desire, workers must act in unison. Again, a mere nudge won't do. Merely knowing that individual actions are self- canceling doesn't eliminate the incentive to take those actions.

The Darwin Economy goes on to explore the consequences and implications of Darwin’s theory being a better model for economics than Smith's invisible hand.

Just Babies: The Origins of Good and Evil

"Children are sensitive to inequality, then, but it seems to upset them only when they themselves are the ones getting less."
“Children are sensitive to inequality, then, but it seems to upset them only when they themselves are the ones getting less.”

Morality fascinates us. The stories we enjoy the most, whether fictional (as in novels, television shows, and movies) or real (as in journalism and historical accounts), are tales of good and evil. We want the good guys to be rewarded— and we really want to see the bad guys suffer.

So writes Paul Bloom in the first pages of Just Babies: The Origins of Good and Evil. His work, proposes that “certain moral foundations are not acquired through learning. They do not come from the mother’s knee … ”

***
What is morality?

Even philosophers don't agree on morality. In fact, a lot of people don't believe in morality at all.

To settle on some working terminology, Bloom writes:

Arguments about terminology are boring; people can use words however they please. But what I mean by morality—what I am interested in exploring, whatever one calls it— includes a lot more than restrictions on sexual behavior. Here is a simple example (of morality):

A car full of teenagers drives slowly past an elderly woman waiting at a bus stop. One of the teenagers leans out the window and slaps the woman, knocking her down. They drive away laughing.

Unless you are a psychopath, you will feel that the teenagers did something wrong. And it is a certain type of wrong. It isn’t a social gaffe like going around with your shirt inside out or a factual mistake like thinking that the sun revolves around the earth. It isn’t a violation of an arbitrary rule, such as moving a pawn three spaces forward in a chess game. And it isn’t a mistake in taste, like believing that the Matrix sequels were as good as the original.

As a moral violation, it connects to certain emotions and desires. You might feel sympathy for the woman and anger at the teenagers; you might want to see them punished. They should feel bad about what they did; at the very least, they owe the woman an apology. If you were to suddenly remember that one of the teenagers was you, many years ago, you might feel guilt or shame.

Punching someone in the face.

Hitting someone is a very basic moral violation. Indeed, the philosopher and legal scholar John Mikhail has suggested that the act of intentionally striking someone without their permission— battery is the legal term —has a special immediate badness that all humans respond to. Here is a good candidate for a moral rule that transcends space and time: If you punch someone in the face, you’d better have a damn good reason for it.

Not all morality has to do with what is wrong. “Morality,” Bloom says, “also encompasses questions of rightness.”

***
Morality from an Evolutionary Perspective

If you think of evolution solely in terms of “survival of the fittest” or “nature red in tooth and claw,” then such universals cannot be part of our natures. Since Darwin, though, we’ve come to see that evolution is far more subtle than a Malthusian struggle for existence. We now understand how the amoral force of natural selection might have instilled within us some of the foundation for moral thought and moral action.

Actually, one aspect of morality , kindness to kin, has long been a no-brainer from an evolutionary point of view. The purest case here is a parent and a child: one doesn’t have to do sophisticated evolutionary modeling to see that the genes of parents who care for their children are more likely to spread through the population than those of parents who abandon or eat their children.

We are also capable of acting kindly and generously toward those who are not blood relatives. At first, the evolutionary origin of this might seem obvious: clearly, we thrive by working together— in hunting, gathering, child care, and so on— and our social sentiments make this coordination possible.

Adam Smith pointed this out long before Darwin: “All the members of human society stand in need of each others assistance, and are likewise exposed to mutual injuries. Where the necessary assistance is reciprocally afforded from love, from gratitude, from friendship, and esteem, the society flourishes and is happy.”

This creates a tragedy of the commons problem.

But there is a wrinkle here; for society to flourish in this way, individuals have to refrain from taking advantage of others. A bad actor in a community of good people is the snake in the garden; it’s what the evolutionary biologist Richard Dawkins calls “subversion from within.” Such a snake would do best of all, reaping the benefits of cooperation without paying the costs. Now, it’s true that the world as a whole would be worse off if the demonic genes proliferated, but this is the problem, not the solution— natural selection is insensitive to considerations about “the world as a whole.” We need to explain what kept demonic genes from taking over the population, leaving us with a world of psychopaths.

Darwin’s theory was that cooperative traits could prevail if societies containing individuals who worked together peacefully would tend to defeat other societies with less cooperative members— in other words, natural selection operating at the group, rather than individual, level.

Writing of a hypothetical conflict between two imaginary tribes, Darwin wrote (in The Descent of Man): “If the one tribe included … courageous, sympathetic and faithful members who were always ready to warn each other of danger, to aid and defend each other, this tribe would without doubt succeed best and conquer the other.”

“An alternative theory,” Bloom writes, “more consistent with individual-level natural selection:”

is that the good guys might punish the bad guys. That is, even without such conflict between groups, altruism could evolve if individuals were drawn to reward and interact with kind individuals and to punish— or at least shun —cheaters, thieves, thugs, free riders, and the like.

***
The Difference Between Compassion and Empathy

there is a big difference between caring about a person (compassion) and putting yourself in the person’s shoes (empathy).

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How can we best understand our moral natures?

Many would agree … that this is a question of theology, while others believe that morality is best understood through the insights of novelists, poets, and playwrights. Some prefer to approach morality from a philosophical perspective, looking not at what people think and how people act but at questions of normative ethics (roughly, how one should act) and metaethics (roughly, the nature of right and wrong).

Another lens is science.

We can explore our moral natures using the same methods that we use to study other aspects of our mental life, such as language or perception or memory. We can look at moral reasoning across societies or explore how people differ within a single society— liberals versus conservatives in the United States, for instance. We can examine unusual cases, such as cold-blooded psychopaths. We might ask whether creatures such as chimpanzees have anything that we can view as morality, and we can look toward evolutionary biology to explore how a moral sense might have evolved. Social psychologists can explore how features of the environment encourage kindness or cruelty, and neuroscientists can look at the parts of the brain that are involved in moral reasoning.

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What are we born with?

Bloom argues that Thomas Jefferson was right when he wrote in a letter to his friend Peter Carr: “The moral sense, or conscience, is as much a part of man as his leg or arm. It is given to all human beings in a stronger or weaker degree, as force of members is given them in a greater or less degree.” This view, that we have an ingrained moral sense, was shared by enlightenment philosophers of the Jefferson period, including Adam Smith. While Smith is best known for his book, An Inquiry into the Nature and Causes of the Wealth of Nations, he himself favored his first book: The Theory of Moral Sentiments. The pages contain insight into “the relationship between imagination and empathy, the limits of compassion, our urge to punish others’ wrongdoing,” and more.

Bloom quotes Smith's work to what he calls an “embarrassing degree.”

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What aspects of morality are natural to us?

Our natural endowments include:

  • a moral sense— some capacity to distinguish between kind and cruel actions
  • empathy and compassion— suffering at the pain of those around us and the wish to make this pain go away
  • a rudimentary sense of fairness— a tendency to favor equal divisions of resources
  • a rudimentary sense of justice— a desire to see good actions rewarded and bad actions punished

Bloom argues that our goodness, however, is limited. This is perhaps best explained by Thomas Hobbes, who in 1651, argued that man “in the state of nature” is wicked and self-interested.

We have a moral sense that enables us to judge others and that guides our compassion and condemnation. We are naturally kind to others, at least some of the time. But we possess ugly instincts as well, and these can metastasize into evil. The Reverend Thomas Martin wasn’t entirely wrong when he wrote in the nineteenth century about the “native depravity” of children and concluded that “we bring with us into the world a nature replete with evil propensities.”

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In The End …

We're born with some elements of morality and others take time to emerge because, they require a capacity for reasoning. “The baby lacks a grasp of impartial moral principles—prohibitions or requirements that apply equally to everyone within a community. Such principles are at the foundation of systems of law and justice.”

There is a popular view that we are slaves of the passions …

that our moral judgments and moral actions are the product of neural mechanisms that we have no awareness of and no conscious control over. If this view of our moral natures were true, we would need to buck up and learn to live with it. But it is not true; it is refuted by everyday experience, by history, and by the science of developmental psychology.

It turns out instead that the right theory of our moral lives has two parts. It starts with what we are born with, and this is surprisingly rich: babies are moral animals. But we are more than just babies. A critical part of our morality—so much of what makes us human—emerges over the course of human history and individual development. It is the product of our compassion, our imagination, and our magnificent capacity for reason.

***

Still Curious? Just Babies: The Origins of Good and Evil goes on to explore some of the ways that Hobbes was right, among them: our indifference to strangers and our instinctive emotional responses.