Lessons from Adam Smith: Private Interest Public Good

by | Oct 30, 2003

Adam Smith, author of “The Wealth of Nations” (1776) and popularizer of modern economics said about people in general and businessmen in particular, “By pursuing his own interest he frequently promotes that of society more effectually than when he really intends to promote it.” That’s a lesson lost in today’s rhetoric of “giving something back”, […]

Adam Smith, author of “The Wealth of Nations” (1776) and popularizer of modern economics said about people in general and businessmen in particular, “By pursuing his own interest he frequently promotes that of society more effectually than when he really intends to promote it.” That’s a lesson lost in today’s rhetoric of “giving something back”, “feeling another’s pain” and caring.

High-schoolers and college students are routinely fed leftist propaganda about businessmen greed. Quite often the lesson begins with one of the “robber barons” such as John D. Rockefeller. But Rockefeller should be celebrated, at least by the leftist of the left, animal rights wackos. Here’s the story.

America was the world’s leading whaling nation. According to James S. Robbins’s article, “How Capitalism Saved the Whales,” appearing in The Freeman (8/92), with 735 whaling ships in 1846, we did 80 percent of the world’s whaling. In the first two decades of the 19th century, whalers killed an average of 15,000 whales annually to produce 4-5 million gallons of sperm whale oil, 6-10 million gallons of train oil and 1.6-5.6 pounds of bone. These products lighted lamps and provided, soaps, paint, lubrication, candles, perfume, corset stays, buggy whips and other useful products. When whaling finally stopped at the turn of the 20th century, there were an estimated 50,000 whales left. Surely, if an average annual kill of 15,000 whales a year continued, whales would now be extinct. What saved the whales? Was it a triumph by Greenpeace or early animal rights wackos? If you say yes, put on the dunce cap.

Whales were saved by the self-interested motives of the much-maligned “robber baron” J.D. Rockefeller. The first step was made by Dr. Abraham Gesner, a Canadian geologist. In 1849, he devised a method whereby kerosene could be distilled from petroleum but it took Rockefeller to make kerosene production a commercial success. With his partner Samuel Adams, Rockefeller set up a network of kerosene distilleries that would later become known as Standard Oil.

As kerosene became cheaper and available throughout the nation, our whaling fleet fell from 735 in 1846 to 39 in 1876. The last American whaling ship left port in 1924 and grounded on Cuttyhunk Island the next day. Spring steel came to replace whalebone in corsets, automobiles replaced carriages and the demand for whalebone buggy whips and wagon suspensions collapsed. In 1879, Edison began marketing the incandescent bulb. As our country became electrified, both whale oil and kerosene were driven from the illumination market.

Whales were not the only beneficiaries of Rockefeller’s activities. The Galapagos turtle was nearly driven to extinction as sailors on whaling ships killed them for fresh meat. With the decline in whaling the turtles were able to survive. Oil-drilling in Pennsylvania helped restore lakes that had become contaminated by natural petroleum leakages.

You might say, “Rockefeller didn’t mean to confer these benefits, so it doesn’t count!” If one takes that position, nothing counts. After all, we all have cars, houses and food, which I think is wonderful. But I doubt whether producers of these goods labored for our benefit because they cared about us. A better explanation is they cared a lot about themselves. That brings up another Adam Smith quotation, “I have never known much good done by those who affected to trade for the public good.” In other words, most good done in the world is done by people pursuing their own narrow selfish interests. Ironically, most world evil is done in the name of good.

Walter Williams (March 31, 1936 – December 1, 2020) was an American economist, commentator, academic, and columnist at Capitalism Magazine. He was the John M. Olin Distinguished Professor of Economics at George Mason University, and a syndicated editorialist for Creator's Syndicate. He is author of Race and Economics: How Much Can Be Blamed on Discrimination?, and numerous other works.

The views expressed above represent those of the author and do not necessarily represent the views of the editors and publishers of Capitalism Magazine. Capitalism Magazine sometimes publishes articles we disagree with because we think the article provides information, or a contrasting point of view, that may be of value to our readers.

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