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No. 1 Adventure of Adam Smith’s Impartial Spectator

The tree care company I hired to do a lot of work around my house was almost finished. I watched the climber tie off and make the final cut to a river birch limb arching above the sunroom at the back of the house. I then watched as that limb plummeted and swung toward the ground catcher who, until that moment, had done a good job making sure no falling limbs hit the house.


The smashing of wood and glass could be heard over the grinding of the chipper in the front yard. Each of the five-man crew froze before pivoting to stare at the new hole in one of the sunroom's 12 pane windows. Seeing the damage but that no one was injured, I hustled around to the front yard to get the company owner. I’ll call him José. I signaled to José to shut down the chipper and follow me. I don’t think I appeared angry, but José understood my urgency and quickly met me around back.


Smashed window from outside


I pointed to the smashed window. There was some initial yelling by José and sheepish responses from his crew. The Latin phrase taught in law school torts classes, res ipsa loquitur – the thing speaks for itself, hung over the crew.


Smashed window from inside


How to repair this 60-year-old, 3’ x 4½’ wooden window was now the focus of this project. José and I examined the damage, talked to each other in only slightly raised voices, he made some phone calls, and then we talked some more. His solution called for a carpenter friend to take out the entire window frame, cover the gaping hole with plywood, take the window to the friend’s cabinet shop where he’d build a new one, and then return and reinstall it all.


Even if José’s plan worked perfectly, I wouldn’t have the repair completed for three or four weeks. Have you ever had a renovation or repair job go perfectly to plan? Yeah, me neither, including the current tree work. Whatever the ultimate cost of José’s plan, it’ll be more time and dollars than he expected to spend. One article, current at the time I’m writing this, puts the cost of replacing a wooden window from $800 to $3800. I guesstimated that if I had contracted someone to do José’s plan, I would be charged at least $2000 for a window this large. That’s half the cost of the $4000 I contracted with José office for the tree work, and perhaps how much that repair might cost him.


Whatever the cost or loss to José to execute on his plan, frankly, it was in my self-interest to have this repair done to my satisfaction and with as little further impact on me and my house as possible. So, I rejected his plan in favor of mine. Before I tell you how José got out of this problem for about $50, remember Adam Smith and his principle of the Impartial Spectator from some earlier Better Capitalism posts.


“Smith opens his first book, Theory of Moral Sentiments, by recognizing the human trait of sympathy as the touchstone and benchmark for human interactions. Smith uses the word ‘sympathy’ throughout Moral Sentiments, while today, and consistent with Smith’s meaning, we use the word ‘empathy’ (cf, The Adam Smith Institute). Through the lens of sympathy-empathy Smith develops the construct of the Impartial Spectator. The Impartial Spectator includes the human traits of self-interest and empathy, and becomes the vehicle by which Smith explains how our interpersonal interactions should be governed, including our economic dealings.” You can read more about this way of framing personal and corporate business ethics here and here."


Now, about that $50 solution. While José was making phone calls I was examining the damage. I confirmed a mullion (the vertical wood divider between panes of glass) was snapped but no other wood was damaged. I also confirmed that two panes of glass were shattered but no other glass was damaged. The unfortunate ground catcher was at least fortunate the damage wasn’t worse.


As I thought through possible solutions, including the obvious ones around insurance claims or deeply discounting the money I owed José under the pretense of fixing the window myself at an inflated cost, I began imagining Adam Smith’s Impartial Spectator standing to the side and watching the next conversation I was about to have with José. While the window looked messy and José looked nervous, the Impartial Spectator calmly and silently expected me to put Its best business ethics forward as José and I negotiated.


From my garage I retrieved gloves and tools. While explaining my plan to José, I removed the remaining glass shards, broken mullion, glazing, and metal points. I showed him how I could glue the mullion back in place and then install new glass, but he had to go and return with two glass panes cut the right dimensions and glazing for me to make a solid repair. Surprisingly, he wasn’t convinced at first. But he finally understood I had an easy solution and wasn’t going to crucify him or his crew for the damage. He also understood I was withholding his entire $4000 payment until he returned with new glass and glazing. I sensed the Impartial Spectator agreeing. José returned the next morning, as he promised, with two glass panes and glazing. I had since repaired the mullion so we could test whether the new glass would fit, and they did.


Smashed window next day (look closely, still needs paint touchup)


In the end, José got what he was owed, which was the check I wrote for him yesterday before his crew smashed my window. I got what I was owed, which was a solid repair I would be happy with (even if I had to spend some time making the repair, it was much less time than I’d spend on an insurance or small claims battle). And we both got what we needed, which was an easy exit from this problem (for which José was exceptionally grateful).


Adam Smith’s Impartial Spectator also got what it was owed and needed, which is another real-life example of an ethic of mutuality - scalable and applicable to every situation. Given my experience, I'll work to invite the Impartial Spectator to all my future negotiations for a result that benefits everyone involved. I encourage you to do the same.



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