A guest on NPR’s Morning Edition (August 26) mis-characterized pioneering economist Adam Smith as a pure transactionalist. Smith’s metaphorical “invisible hand,” the guest asserted, suggested self-interest drives our every action. It’s a big deal – in fact, a revelation! – she continued, that Smith lived with his mother, and that Mom cooked Adam’s meals and washed his laundry for him, unpaid and with Adam oblivious to her role in his theory. The invisible hand, she concluded, ignored familial love as a motive for action.

That is not the case at all.

Adam Smith’s famous Wealth of Nations, in which the invisible hand is introduced, also emphasized morality. Smith was a minister as well as an economic thinker. He knew, and wrote, that individual economic advantage must be tempered by concern for the community’s well-being. The community, after all, supports the individual’s livelihood, by means of roads, schools, spiritual succor, and military defense.

Today’s column won’t pursue the implied questions of short-term vs. long-term advantage, small local producers’ vs. huge absentee corporations’ customer relations, or the consequences of cheating customers and business partners. Instead, it looks at the deceptively simple question of why someone would accuse Adam Smith of a totally transactional stance.

You’ve no doubt observed, for example, that the people who most loudly proclaim their Christianity pick and choose which of Leviticus’ injunctions they espouse, or maybe which of them they follow and which they ignore. Though Smith meant the following statement in a different context, it hit the nail on the head: “The rich only select from the heap what is most precious and agreeable.”*

Actually, many people do this, rich or not. And many people, presumably those of a more selfish bent, picked and chose what was most agreeable to them from Smith’s corpus. They latched onto the self-interest aspects of Wealth of Nations, leaving the parts about community, charity, patriotism, and mother-love to rest, un-remarked upon, in the book’s pages.

I called the question deceptively simple because it turns out to explain a lot about where we are today as a nation and as a world society. The transactional philosophy, sans its moral tempering, infiltrated much subsequent economic theory. We have Mr. Trump, who is widely seen to take a transactional view of pretty much everything. Art of the Deal, right? Tariffs, loyalty-based employment, and a complete misunderstanding of what alliances are for – all stem from a transactional personality.

And sadly, transactionalism propagates itself. Science20 readers will be distressed by Turekian and Gluckman’s editorial in the August 21 issue of AAAS’ Science magazine. Until recently, the duo write, international scientific cooperation aimed at:

opening channels between adversaries, a common language across cultures, and a refuge for dialogue in times of political rupture…. [However] as multilateralism falters and geopolitical rivalries intensify, nations are putting greater emphasis on science and technology as strategic assets.
Of late, there has been a shift to… a focus on dealmaking, and near-term returns for the players within broader national strategy. Science’s value now is seen as not just a tool of cooperation but also as a currency of negotiation. Agreements are contingent, driven by near-term benefit, and increasingly aimed at advancing national interests.

Transactionalism, then, has infiltrated science, politics, and the perspectives of individuals. It may explain Americans' feelings of loneliness: The press reports sharp decline in the number of friends we (especially males) have. There's a mutualism in friendship, of course, but a purely transactional approach to friendship will fail. We might even say industry benefits from propagating transactionalism, as we compensate for our loneliness by buying more stuff.

Knowing that some folks are primarily transactional, while others tend more toward the communitarian, enhances our grasp of geopolitics, and our understanding of social polarization and atomization in America.

* https://www.panmurehouse.org/adam-smith/works/the-theory-of-moral-sentiments/. See also Evensky, Jerry. 1993. "Retrospectives: Ethics and the Invisible Hand." Journal of Economic Perspectives 7 (2): 197–205.