Adam Smith revisited

On a sleepless night, you fancy set about reading from the « father of capitalism », Scotland’s Adam Smith. Pay attention to what book you pick! The most classic choice is The Wealth of Nations. Ever wondered why this one became a most referred, least completely read book from the author? Ever thought about discovering a quite different essay: The Theory of Moral Sentiments? It’s all about life, economics and much more…

A misreading: Adam Smith never ever pretended that only the « invisible hand » – a suggestion among others, to replace within a time of wealth stagnation, often seen as fatality – would lead to progress for every one! Actually Smith himself did realize potential risks of drifting from his refreshing economic innovation. « Free market » and « individual profit benefiting everyone » concepts, further to centuries of feudalism and oppression, were true revolutionary themes! Before publishing (in 1776) his so famous « Inquiry into the Nature and Causes of the Wealth of Nations », Adam Smith went sentimental and humanist when he wrote « The Theory of Moral Sentiments » in 1759. So here’s our misleading fallacy: to fall in love with volume 2 while forgetting about volume 1! Smith’s editor’s marketing fault?

Apparently freed from any moral constraint, capitalism took off tremendously all over the world. Thanks to large and abstract stats and maths formulas, it turned professional, so rational, irresistible!! We see it everyday, a kind of extreme capitalism not so liberal and not willing to share. Embodied in large monopolies and oligopolies, sometimes if not always treating resources and consumers no better than milk cows. Power struggle leading to commanding position and its abuse… What a stereotype! On the other (invisible) hand, another kind capitalism, moderate, open and sharing also developed. Was is the one foreseen by Adam Smith? You find it everywhere, around the corner, as in thousands of SMEs, human scale industry and craftsmanship. Small is beautiful, with more balanced power between stakeholders (employers and employees, consumers and citizens). Down on earth capitalists, entrepreneurs with real ambitions. Some seek a kind of harmony, through cooperation and long lasting links. At the heart of real economy and territories, these firms remind of the Gauls villages (Asterix). They do resist as germs resist to antibiotics! That’s probably the magic of capitalism. Not to forget innovation and local jobs creation.

Governments always welcome fair businesses, while they keep struggling with bandits. Sorry for Friedman’s clique, with extreme views to laminate public forces and consequently lead to impoverished democracy. Technology (Internet, enabling further sharing of goods and services including energy) reshuffles entire economic sectors. A new generation of entrepreneurs is on board, disenchanted by our economic, cultural and environmental heritage. An opportunity for « intrapreneurs » as well. Sharing economy  is a surprising fait accompli of the 21st century. From Paris to London, Berlin, Seoul and San Francisco. Watch out: sharing is actually among all of us, giving a new way to Adam Smith Theory of Moral Sentiments: Blablacar here, Zipcar there, Vélov ou Vélib, AirBnB, etc. Good deals are easily found on the Web, at anyone’s fingertips! The meaning of sharing is very strong, replacing humans at the heart of the system. As always, conservative companies initially just observe, then express skepticism or denial, trying to minimize the new tsunami…

Adam Smith would be proud of this last but not least attempt to merge concepts from his own books, right between « wealth » and « moral sentiments », in order to find a place for every human into economy!


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