The Answer Is Transaction Costs Are Transaction Costs Really Just Human Distance
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Mar 24, 2026 They trace Adam Smith’s moral psychology to modern transaction costs and the history of the term from Coase to Scitovsky. They explore epistemic distance and why imagining others matters for sympathy and coordination. They discuss propriety, self‑command, reputation, and how commerce trains restraint to lower frictions. They contrast justice and beneficence for stable social order.
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Sympathy Requires Imaginative Work
- Sympathy requires imaginative effort because we infer others' feelings by imagining ourselves in their situation.
- Smith emphasizes narration and contextualization: people must explain circumstances before shared sentiment and cooperation emerge.
Propriety Is Social Calibration
- Propriety means emotions must be proportioned so an impartial spectator can accept them, not just sincere expressions.
- The sufferer must moderate passion so spectators can join the sentiment, making self-command socially valuable.
Social Distance Raises Coordination Cost
- Social distance raises coordination costs; distant audiences demand simplified, restrained emotions for intelligibility.
- Presence of others helps regulate feelings because we see ourselves from outside and modulate passion accordingly.
