Self-Delusion, The Great Disorder: Words of Wisdom from Adam Smith & Russ Roberts

“Self-deception can be more comforting than self-knowledge.
We like to fool ourselves.” – 
Russ Roberts

It’s his “other classic”… the one that few in our modern times have ever read, or even heard of.

After all, how could Adam Smith, the “Patron Saint of Capitalism” have written a book dealing not with economics but with…self-help!?

Yet, the author of The Wealth of Nations did indeed write The Theory of Moral Sentiments. That book looked deeply into the connection between understanding human nature and how one can live a happy, peaceful and fulfilling life.

Fortunately, in Russ Roberts newest book, How Adam Smith Can Change Your Life: An Unexpected Guide To Human Nature And Happiness we are provided with insights into the brilliance of the 18th century Scottish philosopher. However, these have little to do specifically with economics/ finances and everything to do with understanding life, ourselves, and others.

As the magnificent Harry Browne taught in, The Secret to Selling Anything, human nature is such that we all seek happiness as we individually understand it, and within the available choices we perceive.

So, it makes sense then that successful people do not deny human nature but rather respect and work within it. This means we must take into consideration the human nature of others…and ourselves!

One of the early lessons we learn in this book that can help us to live a happier life based on Smith’s insights include:

“Man naturally desires, not only to be loved, but to be {worthy of being loved}.

This was a key premise. Yes, much more than just desiring admiration from others for the high-qualities and character traits they think or believe one has, one also – in order to feel good about themselves – must actually see themselves as being that way.

Yet, as human beings we often do things contrary to that desired feeling.

How does this important element of human nature come into play regarding the actions we take… which we intuitively know are wrong?

It is here that I’d like to focus on one area of the book Roberts takes us through in which we need to focus on ourselves, and that is self-delusion.

We must know and understand ourselves in order to be an effective human being. Yet, our own desire to be worthy of being loved often causes us to deny that we acted inappropriately or simply counter-productively.


Smith wrote, “Self-delusion is the source of half the disorders of human life.”


So, what really is self-delusion? Roberts begins by explaining that often we have to choose between what is pleasant… as opposed to what an impartial spectator (a term used by Smith that could be interpreted loosely as our conscience or true sense of right and wrong) would see as the right thing to do.

When we deny the incongruence of such, we are deluding ourselves.

Early in my book, Adversaries Into Allies I discuss the fact that as human beings we make decisions emotionally and then, in order to justify that emotion-based decision, we rationalize. In other words, we tell ourselves “rational lies.”

While this isn’t anything knew to Early to Rise readers such as you who regularly study these principles, it is certainly an insight into self-delusion.

Going Great Lengths to Self-Deceive

We so want to feel worthy of being loved, while still wanting to do what we desire to do, that we simply cannot allow ourselves to see the wrong action we took. So, we tell ourselves a story. And, we eventually believe that story.

“Rational lies.”

As Roberts says, “An honest assessment of our behavior is often too hard to bear.”

It can be as big as going ahead with that potentially lucrative joint venture even though you suspect the JV partner is not 100 percent honest with their customers. Or, it could be as small (sorry Craig) as not rising early and working out just this one day because you just don’t feel like it.

Self-deception also occurs when, as Roberts pointed out, we say (and, yes, truly, truly believe) we are taking an action for the benefit of the other person when in actuality we are doing it in order to meet our own needs and desires.

Any of the above examples – assuming they are incongruent with our personal values – can cause us to rationalize away. And, as Smith taught,“we are prone to self-deception.”

“It is so disagreeable to think ill of ourselves, that we often purposely turn away our view from those circumstances which might render that judgment unfavourable.”

 “Rational lies.”

The author than adds a powerful explanation:

“To rephrase Smith’s original line about being loved and {worthy of being loved} we want not only to be loved, we want to think of ourselves as {worthy of being loved}. Rather than see ourselves as we truly are, we see ourselves as we would like to be. Self-deception can be more comforting than self-knowledge. We like to fool ourselves.

Confronting our frailty and our failing can be too painful. So, yes, we avoid situations in which we are forced to confront our shortcomings. It’s much more pleasant to delude ourselves. We are all cowards to some degree when it comes to self-awareness.”

“Rational lies.”

And, I KNOW I’ve done it!

This self-deception – as you can well imagine – is a hindrance to our own self-improvement. After all, unless we can see ourselves honestly, we cannot work on that which is needed.

How Do We Overcome This Tendency?

The following combines both the teachings of Roberts and Smith, and my own suggestions:

#1 First things first. Like overcoming any negative aspect of our lives, we must be aware it’s an issue in the first place. Without this awareness we will not be in a position to take the steps to correct it.

Do you realize that you fall victim to self-deception? Do I realize that I fall victim to self-deception? If we do, we have now established the correct foundation.

#2 Step outside ourselves and view our actions (or potential actions) as would a literal impartial spectator. Generally speaking, we can only attain happiness by acting congruently with our values. So, when we view ourselves through the eyes of that impartial spectator we are much more likely to act appropriately and without self-deception.

#3 When our urges to act incongruently with our values (which again, might be nothing more than eating a pizza while on a pizza-less food regimen) takes over and we find ourselves rationalizing afterwards, make sure that even our impartial spectator sees things as they are, not as we wish they were.

As indicated by many of the earlier quotes, however, this can be quite difficult.

#4 Take note of when others do this very same thing. This is based on a suggestion by Smith that, as Roberts relates, says that “Not surprisingly, we find it much easier to see the moral imperfections in others than our own shortcomings.” Roberts than referred to the teachings of a famous Rabbi who said that:

“We can notice the flaws in those around us to remind us of our own flaws and to spur us to self-improvement. Our flawed neighbors are the mirror that allows us to see our own imperfections and ideally to remedy them.”

Thus, Roberts suggests that we observe the specific flaw they have displayed and then ask ourselves if that is a trait that we also possess.

Smith believed very strongly that we can utilize social norms, as well as our own intrinsic reactions to some behaviors to help our impartial spectator in keeping us from doing that which would make us less {worthy of love}.

#5 Consult a mentor. As Roberts writes:

“Smith reminds us that it’s hard to be objective when you have a horse in the race—your own self-interest. It’s easy to convince yourself that you’re doing the right thing when you’re merely doing what benefits yourself. One way to protect yourself in such a situation is to seek out a mentor or a truly impartial real-life spectator who can help you see throughout the haze of {self-deception} that so often blinds us.”

#6 Stay ever-vigilant to this aspect of our human nature. Realize the truth…that you (and I) self-deceive.

Following all of these steps we probably won’t stop deluding ourselves 100 percent but we can make great strides toward becoming a much more successful and effective person.