Is Adam Smith The Founding Father of Sustainability?

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When I was working on my MBA in Sustainable Enterprise back in 2007 I remember the first time that Adam Smith popped into my consciousness.  It was a typical Sunday afternoon class. We’d been in classes since Friday morning at 9am and were in the home stretch of our 3-day stint, so many were already imagining their Sunday dinner plans . We were all tucked away in a small classroom on the campus of the local Waldorf school discussing the social impacts of enterprise on the natural, human and financial capital markets when in the midst of the discussion someone invoked the name of Adam Smith and his “invisible hand” theory, along with his “acting in my self interest” tenets, as being at the core of our lack of sustainability.  This particular student felt that Smith’s theorem had given capitalists carte blanche behavior to pursue their self interest as some kind of higher order of self-actualization.

I found myself questioning whether we had fully understood these keystone principles to our economic system, so I started to do some research into Smith’s invisible hand and self-interest theorems.  What I discovered was truly disruptive to my loosely constructed yet long held beliefs.  Within the Wealth of Nations I found that Smith’s “invisible hand” was mentioned exactly once in over 1,000 pages of densely crafted words.  Furthermore, I discovered that Smith’s preamble to the invisible hand contained language about the intelligence and prudence of keeping one’s money close to home.  Smith writes,

In the home-trade his capital is never so long out of his sight as it frequently is in the foreign trade of consumption. He can know better the character and situation of the persons whom he trusts, and if he should happen to be deceived, he knows better the laws of the country from which he must seek redress.”

This passage occurs just a few paragraphs before the singular “invisible hand” statement and is often overlooked or unmentioned in any reference. What I found fascinating was that Smith was in essence touting a “local” economy as preferred over a dispersed economy.  I thought this fit a sustainability ethic and continued reading.  Further along, I found that the invisible hand passage actually builds on this concept of character and trust, when Smith writes,

By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.”

I was captivated by this passage that I re-read it over and over to be sure I had understood its context in this new light.  What I realized was that Smith was not espousing a “selfish” interest based solely on my individual benefit, but was reporting on the fact that my actions are always placed within the larger context of society.  Moreover, that “by preferring the support of domestic to that of foreign industry…” my self-interest was based on trust in my fellow man.  And, who better to trust than my local merchant?  Someone who I can look in the eye every day?  Someone who I can judge by their character based on my own observations of their acts?  Suddenly, I saw Smith in a whole new light… a “re-enlightenment” of his principles and positions.

Following this review of the Wealth of Nations I discovered his first published work, The Theory of Moral Sentiments, which was published in 1759 some 17 years prior to Wealth.  This book has dramatically changed my view on Smith.  To me, it’s a manifesto for sustainability.  He writes more of morality than economy.  In fact, Smith was not an economist.  He was a moral philosopher who used the commercial interactions of people as the backdrop for his moral analysis.  I believe it gave Smith a platform for his hypotheses and theorems to be tested, scrutinized and perfected. The Theory of Moral Sentiments was his favorite work as he said many times that it was his best writing.  He went on to edit and modify it for the remainder of his life completing six editions to the original.

Since the first day I received my 250-year anniversary edition of the Theory of Moral Sentiments it has become an omnipresent part of my daily life.  I carry my dog-eared copy with me to all places and enjoy taking its colorfully tabbed plumage out for others to view.  Over the past year I’ve introduced this subject to many, many different people.  And, nary a one was familiar with his first book.  To their surprise, I would share with them this “invisible hand” passage:

They are led by an invisible hand to make nearly the same distribution of the necessaries of life, which would have been made, had the earth been divided into equal portions among all its inhabitants, and thus without intending it, without knowing it, advance the interest of society, and afford means to the multiplication of the species.

To me, and to many of those I’ve shared this with, the invisible hand theory espoused in this passage resonates much more emotively than does the original invisible hand.  Part of this reaction is due to the lack of understanding of the better known version from Wealth.  Most do not recall that the invisible hand described in Wealth had the preamble of trust, character and localism at its core.  Reading this one from Theory, provides a larger context of sustainability than I believe we’ve ever had described to us before.  Smith is laying out a sustainable framework for commercial behavior by placing on us the moral obligation to support the common society.  By making the welfare of society the primary building block of my self-interest, Smith has created a manifesto for sustainability.

I’ve created The Sustainable Adam Smith to provide a forum for a renewed dialogue about Smith’s seminal works. I believe that Smith holds great promise for the future of commercial enterprise on a local and global level.  As much as Smith was part of the Enlightenment movement back in the 1700′s, I believe he can be the centerpiece for our Re-Enlightenment movement.  Capitalism has been using Smith as their North Star for directing their profit making ways for over two centuries. I don’t disagree with that decision.  I believe that Sustainability can also co-opt Smith’s tenets to serve as our North Star to guide our efforts.  In an interesting twist of fate, Smith serves both of our self interests.  The challenge for our global society going forward will be to what degree we will align those stars or force them into a collision course that could be the ruin of all.

We stand at the most important moment in human history and this is just the beginning of a new global economy.  I encourage your participation and welcome all opinions and ideas to this site and our work towards building a world where the invisible hand guides us to shared prosperity.

Nils M. Langenborg

Founder & Executive Director


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3 Responses to Is Adam Smith The Founding Father of Sustainability?

  1. Elaine McCarty says:

    Thank you, Nils, for clarifying economic theory that has been co-opted by many economists and politicians to encourage greedy behavior by individuals and poorly intentioned policy for governments. It appears misrepresentation and manipulation of Smith’s works have been used to justify practices that have been destructive for human beings, ecosystems and this planet.

    I look forward to hearing more analysis, comments and discourse on the subject.

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  2. J says:

    Hey Nils, nice points, Was cool to meet last night. I’ve read bits and pieces of Wealth of Nations, it was amazing at B-school how few of my contemporaries had ever tried to read his ideas. I’ll keep tabs on this,


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  3. Nils,

    Check out O’Rourke, P. J. (2007). In Smith A. (Ed.), On The Wealth of Nations (1st ed. ed.). New York, New York, U.S.A.: Atlantic Monthly Press; Distributed by Publishers Group West.

    In his summary of Smith he makes this exact same point… p26-37!

    Good work glad I found this…

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