Intro. [Recording date: March 10, 2026.]
Russ Roberts: Today’s date is March 10th, 2026, and I am joined by economist Ross Levine, the Booth Derbas Family, Edward Lazear Senior Fellow at the Hoover Institution, and co-director of Hoover’s Financial Regulation Working Group. Before his tenure at Hoover, he was part of the faculty at the University of California at Berkeley’s Haas School of Business. Ross, welcome to EconTalk.
Ross Levine: It’s great to be here, Russ.
Russ Roberts: Today, we’re diving into the world of Adam Smith. Just yesterday, on March 9th, we celebrated the 250th anniversary of the publication of The Wealth of Nations. Ross, you’ve chosen an intriguing way to commemorate this milestone. Could you elaborate on your project, titled ‘From the Hand of Adam Smith’?
Ross Levine: Absolutely. I decided to mark not only the 250th anniversary of The Wealth of Nations but also the significance of U.S. independence. I was invited to write about American independence, and I proposed a series of monthly letters as if they were penned by Adam Smith to the people of America in 2026.
The aim of these letters is to remain true to Smith’s essence while ensuring they are accessible to modern readers. As you know, Smith is often oversimplified or mischaracterized, but his insights as a scholar, psychologist, and political scientist are profoundly relevant even today.
Russ Roberts: I find this project fantastic! I attempted something similar in my book, How Adam Smith Can Change Your Life, but your letters are shorter and more digestible. They can be found on a platform called Freedom Frequency, a Hoover channel on Substack. Let’s delve into the first two letters. The opening of the first letter sets a compelling tone:
My Dear Friends,
I view your era with both admiration and astonishment. The conveniences and comforts you enjoy are beyond the wildest dreams of the barons and nobles from my time. Yet, you measure your sleep as if tranquility can be quantified, pursue productivity as if resting is a moral failing, and rise to the call of voices urging you to maximize every moment without pausing to ponder: Why?
What an opening! Your writing captures a Smithian essence while seamlessly integrating your own insights. What is Smith conveying to modern readers from his 18th-century perspective? What questions is he prompting us to consider?
Ross Levine: Smith is essentially asking us, ‘What drives your relentless effort? What motivates your hard work?’ He highlights a recurring theme: we often labor intensely to garner admiration and esteem, seeking praise from others. While this motivation is timeless and universal, he cautions that pursuing it may lead to a sense of emptiness and dissatisfaction. In contemporary America, it’s clear many people are toiling excessively, and starting with Smith’s inquiry into ‘Why are you doing this?’ seems fitting.
In his first book, The Theory of Moral Sentiments, Smith embarks on a similar journey of introspection, making it a pertinent approach for engaging a diverse readership.
Russ Roberts: Your opening emphasizes optimization and maximization. It’s reminiscent of today’s ‘life-hack’ culture—how to achieve more with less effort. Why did you choose this focus instead of directly questioning why people work so hard?
Ross Levine: Living in Silicon Valley, I’ve seen people obsessed with gadgets that track sleep and productivity, all in an effort to enhance efficiency. Amid soaring housing costs, it prompts the question: Why are we chasing this? Personally, I’ve reached a stage where financial necessity isn’t my primary driver. This raises the question: ‘What do I truly want to accomplish with my time?’ My reflections are shaped by both my personal journey and my observations of those around me.
Russ Roberts: You’ve quoted the poet Gerard Manley Hopkins, who said, “I am my work: for that I came.” This raises profound questions about the nature of work and motivation. Smith recognized that our stated reasons for working often differ from our true motivations. What does Smith identify as the core of our motivation?
Ross Levine: Smith’s perspective contrasts sharply with mainstream economic thought. He posits that our fundamental motivation is to be seen and admired. We yearn for the approval of others, a notion often overlooked by economists who model behavior based solely on individual utility and consumption. Anyone who interacts with their community understands that social dynamics significantly shape our motivations. Smith argues that our moral sentiments are deeply influenced by our social interactions, which begin in childhood.
This drive for approval can lead to a distorted sense of happiness. Smith encourages us to seek internal validation from our ‘impartial spectator’ and to strive to be admirable rather than merely seeking admiration. This insight is profound, especially when we consider Smith’s broader narrative about achieving a fulfilling life.
Russ Roberts: You’ve mentioned that many people might continue to pursue accolades even when they’ve achieved significant success. Isn’t that the case for you, given your accomplishments in academia? Are you not satisfied, or are you simply caught in a habitual pursuit?
Ross Levine: It’s a complex issue. Personally, I’m fortunate to have the love and approval of those closest to me. However, my drive for recognition and status has been a significant motivator in my life. Recently, I’ve been reflecting on what I genuinely want to do moving forward. Now, I’m exploring new avenues, such as writing for a broader audience without the constraints of empirical data. Engaging with Smith has inspired me to embrace this journey.
Russ Roberts: It reminds me of a quote from George Allen, the former coach of the Washington Redskins, who supposedly said, ‘I don’t send Christmas cards. They don’t help you win football games.’ Many economists have a similar mindset, prioritizing outputs over personal connections. Do you think this academic treadmill can evolve with the rise of AI and changing peer-review dynamics?
Ross Levine: That’s certainly possible. The academic landscape is shifting, and the rise of AI could redefine how we approach research and peer review. This evolution may inspire some scholars to seek fulfillment beyond traditional accolades.
Russ Roberts: Let’s discuss the Parable of the Poor Man’s Son. Can you summarize the essence of this story and its relevance to our discussion?
Ross Levine: This story, often retold in various forms, follows a young man from humble beginnings who believes that wealth will bring him esteem and happiness. He dedicates his life to accumulating riches, neglecting family and personal well-being. Ultimately, he realizes in his old age that despite his wealth, he has led an empty life, filled with regret for the choices he made. Smith illustrates that seeking external approval can lead to profound dissatisfaction, urging readers to prioritize internal virtues over external accolades.
How do you interpret the story, Russ? You’ve often discussed Smith’s views.
Russ Roberts: I find the contrast between the Poor Man’s Son and the rich quite telling. The narrative speaks to the sacrifices made in the pursuit of wealth and the emptiness that often accompanies it. It’s a cautionary tale about the dangers of valuing superficial success over genuine virtue and connection. Smith, unlike many contemporary thinkers, emphasizes the importance of being ‘lovely’—admirable in character—rather than merely seeking love and admiration from others.
Ross Levine: Exactly. Smith suggests that while it’s natural to seek approval, true happiness and contentment stem from inner integrity and virtuous living. When societal admiration aligns with virtuous behavior, that creates a fulfilling life.
Russ Roberts: Let’s touch on Imposter Syndrome. It’s the feeling of being unworthy despite external validation. How does this relate to our discussion about self-perception and societal expectations?
Ross Levine: Imposter Syndrome is a common struggle. For many, including myself, it can be challenging to reconcile external accolades with self-doubt. Smith’s insights encourage us to focus on our true selves, rather than worrying about how others perceive us. Engaging with our own integrity and striving to be good people can mitigate these feelings.
Russ Roberts: Indeed, it’s about aligning our external reputation with our internal values. The pursuit of authenticity over mere validation can lead to deeper satisfaction.
Ross Levine: Yes, and this alignment is critical for our overall happiness. Smith emphasizes that virtue and integrity go hand in hand with genuine self-worth.
Russ Roberts: Following this line of thought, how can we help individuals internalize the message of seeking fulfillment from within, rather than from external approval?
Ross Levine: It’s essential to recognize that many people are trapped in jobs that lack intrinsic satisfaction, primarily to support their families. For those with the means to reflect, it’s crucial to ask what drives their work and whether it aligns with their values. The opinions of others can shift rapidly, making it vital to seek personal fulfillment rather than chasing fleeting external validation.
Russ Roberts: Engaging in ‘soul work’—self-reflection through religion, meditation, or literature—could help individuals discover their true aspirations, rather than racing blindly ahead.
Ross Levine: Absolutely. Establishing a strong sense of self is essential for navigating today’s fast-paced world.
Russ Roberts: In your second letter, you provocatively ask, ‘Are you admiring the right people?’ Why is this an important question in today’s context?
Ross Levine: This question is vital for two reasons. First, it reflects Smith’s belief that our values shape societal prosperity and justice. Second, in a media-saturated world, who we admire influences our aspirations. If we idolize individuals for wealth and power rather than virtue, we risk perpetuating harmful societal norms.
Russ Roberts: It’s intriguing how admiration can lead to a desire to emulate those we look up to, often overlooking their moral shortcomings.
Ross Levine: Exactly. Our admiration should be grounded in virtue, not just wealth or fame. This distinction is crucial for fostering a just and equitable society.
Russ Roberts: You assert that admiring the wrong people threatens the foundation of a free society. Could you outline the key reasons behind this claim?
Ross Levine: Smith believed that misplaced admiration corrupts our moral compass. Here are four key reasons:
1. If society admires the wrong actions or individuals, people will emulate those behaviors, leading to unethical practices.
2. A focus on wealth over virtue undermines justice, eroding trust in societal institutions.
3. Admiring the wrong figures may lead us to overlook their moral failings, further weakening the judicial system.
4. This misplaced admiration fosters a culture of servility, where individuals defer to those in power, regardless of their integrity.
Russ Roberts: Reflecting on the narratives we cherish, there seems to be a shift towards glorifying the wrong ideals. What do you think accounts for this change, especially in light of stories that once celebrated virtue?
Ross Levine: It’s true that contemporary society often admires glitz over genuine virtues. However, I believe that local communities still uphold virtuous traits. My personal experiences in my neighborhood affirm that, despite political differences, people are willing to support one another.
There is hope that these local virtues can counterbalance the more toxic elements of societal admiration at larger scales.
Russ Roberts: I want to share a quote from Smith that encapsulates our discussion:
To deserve, to acquire, and to enjoy the respect and admiration of mankind are the great objects of ambition and emulation. Two different roads are presented to us, equally leading to the attainment of this so much desired object; the one, by the study of wisdom and the practice of virtue; the other, by the acquisition of wealth and greatness.
How can one not appreciate Smith’s wisdom?
Ross Levine: Indeed! The beauty of Smith’s words often gets lost when he’s caricatured in popular culture, such as in the famous line from Wall Street: ‘Greed is good.’ Smith would vehemently dispute that notion.
Russ Roberts: His insights are timeless, offering a profound understanding of human nature and the complexities of our desires.
