This month of June we celebrate the birth of the Scottish economist and moral philosopher Adam Smith, born in 1723. Famous for his "invisible hand" theory, something he briefly mentions just once in the middle of his book The Wealth of Nations, he gets remembered as the father of free-market capitalism. He is mistakenly credited with being an adamant defender of the power of self-interest just because in the opening paragraph of his book, he says that bakers and butchers operate their businesses over rational self-interest rather than altruism.
But in fact what many people don’t know about Smith is what a profoundly moral and just person he was. Author of the book The Theory of Moral Sentiments, he was strongly influenced by the philosophy of stoicism. As he writes,
“One individual must never prefer himself so much even to any other individual, as to hurt or injure that other, in order to benefit himself… and who does not inwardly feel the truth of that great stoical maxim, that for one man to deprive another unjustly of anything, or unjustly to promote his own advantage by the loss or disadvantage of another, is more contrary to nature, than death, than poverty, than pain, than all the misfortunes which can affect him, either in his body, or in his external circumstances.”
It is ironic that the pretended father of market capitalism would say “what’s bad for the hive is bad for the bee”, but Adam Smith firmly believed that if we take care of ourselves, if we hold ourselves to high standards, and we actively work not to hurt other people, then we indirectly and directly make everything better for everyone. He actually was obsessed with the idea of how to make a capitalist economy more humane and more meaningful. He wanted to understand the money system because his underlying ambition was to make nations and people happier.
A strong moral philosopher, Adam Smith discerned that bosses have the responsibility to their employees to remind them of their purpose, role and ultimate dignity of their work. Smith never once used the term “laissez-faire” or even the term “capitalism,” and his books are full of passages lamenting the potential moral, social, and political ills of what he called “commercial society"; and are full of ideas of how human values can be reconciled with the needs of businesses.
It will be then pretty safe to state that Adam Smith is the father of Conscious Capitalism. Though Smith may assert that each one of us is guided by our self-interest, he also presupposes that we are guided by some internal morality and an awareness of one’s place within the broader context of our community.
Learn more about the book Leadership And Consciousness