In their article, Michael Brady and Clark Tang analyze the virtues within the writings of two philosophers about 22 centuries apart and geographically thousands of miles apart: the Chinese Confucius and the Scottish Adam Smith. In the Analects, a book in which texts attributed to Confucius and his disciples come together, and in the final version of Adam Smith’s Theory of Moral Sentiments, Brady and Tang took excerpts to support the similarities of the conclusions of both authors.
The Confucian position on the pursuit of wealth and honor and the aversion to poverty and misfortune is that if the former implies deviating from the path (Dao) and the latter is a consequence of sticking to it, it is preferable not to avoid the latter. For Confucius, exemplary people (junzi) cultivate their excellence, fairness, and know what is appropriate, but mean people cultivate their land, thoughts of gain, and understand what is of personal advantage.
In one passage he considers acts of eating simple food, drinking pure water, and lying on his own arm, acts where pleasure can be found. But wealth and status achieved through inappropriate means are like floating clouds, a passage which Brady and Tang see as an example of the virtue of temperance.
Confucius also cites three behaviors that exemplary people (junzi) protect themselves from: when young and vigorous, they protect themselves from licentiousness; at its peak, when vigor is at its maximum, they avoid conflict; and in old age, when vigor is waning, they protect themselves from acquisitiveness. The authors of the article comment that this point connects with self-command, which for Adam Smith is the combination of the virtue of courage and temperance.
For Adam Smith, the most
perfect state of human nature and the most complete state of happiness that
human beings can appreciate is bodily well-being and the tranquility of the
mind, which is the only end of all virtues, which are desirable for their
tendency to bring about this end, but undesirable in themselves. He cites the
example of prudence that is ”
source and energizer of all the virtues, but it isn’t desirable on its own account”. This cautious state of mind, always paying attention to the consequences of each action, cannot be considered pleasant in itself, but its value lies in its tendency to seek good and keep evil away. Smith views temperance as a prudence toward pleasure, which is not desirable either, but has value in avoiding present pleasure for something greater in the future or avoiding future pain. Fortitude is also seen as a form of prudence, good judgment, and the presence of spirit by properly appraising work, pain, and danger, choosing a lesser evil to avoid a greater one. And finally, justice is also viewed by Smith as a way of maintaining the security and tranquility of the mind, as by taking something that is not from your own, the fear of being punished would cause fear and mental confusion, as well as not helping others in their own right, according to their relationship to us, it would generate hatred and contempt, rather than esteem and love if the opposite were done. Justice, the most important virtue in Smith’s view, is to him nothing more than prudent and discreet conduct toward our neighbors.
In his book “The Dao of Capital”, Mark Spitznagel defends the idea that in order to succeed in investments, the best strategy to be adopted is not the one that seems to be the most straightforward. He brings the ideas of two other thinkers from ancient China, Lao-Tzu, with the concept of wei wuwei, or doing / not doing, and Sun Tzu, with the concept of shi, which Spitznagel interprets as an indirect path to achieving an end, by obtaining a positional advantage, using both ideas to defend that the best strategy for investing is often to wait, suffer some losses and look for an roundabout way – that provides some future advantage – having in mind greater future earnings. In order for Robson Crusoe to catch more fish, he must catch fewer fish a day, eating less, so that he can focus on building tools that will help him fish more efficiently, such as a canoe and a fishing net.
Spitznagel quotes a passage from Henry Hazlitt’s book Economy in a Single Lesson, which in his opinion, the words “act or politics” and economics could be changed to “capital or process of production” and “investing” respectively: “The whole economy can be reduced to one lesson, and that lesson can be reduced to one sentence: The art of economics is to look not only at the immediate effects, but at the longer effects of any act or policy.”
Paraphrasing Hazlitt: The art of virtue is to look not only at the immediate effects but at the longer effects of any virtuous action. Since the end of all virtues is genuine happiness or eudaimonia, virtue is a shi, helping reach it.
Brady, M. E., & Tang, C. (2019). Adam Smith and Confucius on Virtue Ethics: Very Similar Conclusions. Available at SSRN 3362110.
Spitznagel, M. (2013). The Dao of Capital: Austrian Investing in a Distorted World. John Wiley & Sons.