Synopsis
Although the phenomenon of capitalism predates Adam Smith he is often characterised as its architect. His main influence in the history of capitalism was demonstrating how the mercantile capitalism of his era was inhibiting the flowering of entrepreneurial trade within and between nation states. His vision of laissez faire capitalism enables an ‘invisible hand’ to distribute wealth to all participants in the enterprise, trickling down from the richest to the poorest. This chapter also compares and contrasts the main themes of Smith’s Wealth of Nations with his other major work, Theory of Moral Sentiments. The latter, not read by many economists, is relevant to my approach to business ethics in Part IV.
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Notes
- 1.
- 2.
Smith, TMS, Part I, Sect. III, Ch. ii, para. 1, p. 61. See also Mandeville (1988), Vol. I, Remark (P.), # 182, p. 69.
- 3.
Smith, TMS, Part IV, Ch. I, para. 6, p. 211.
- 4.
Smith, WON, Vol. II, Bk. V, Ch. i, Part ii, p. 231; Vol. I, Bk. III, Ch. ii, p. 412.
- 5.
Smith, TMS, Part I, Sect. III, Ch. iii, para. 1, p. 72.
- 6.
Smith, TMS, Part IV, Ch. ii, para. 10, p 215. See a similar theme in Mandeville, Vol. I, Remark (L.), para. 109–10, p 108.
- 7.
Smith, TMS, Part VII, Sect. II, Ch. iv, para’s. 6–13, pp. 363–70.
- 8.
Smith, TMS, Part II, Sect. II, Ch. iii, para. 2, p.100.
- 9.
Smith, WON, Vol. I, Bk. IV, Ch. iv, p. 433. This is the opposite view to that of noted contemporary economist/philosopher Amartya Sen who says good government providing the infra-structure for education, health and justice is a pre-requisite for economic prosperity as is evident for Japan, Hong Kong, Singapore, Taiwan and South Korea. Predominant Third World development agendas over the last 50 years have been based upon Smith’s view. See Sen, Development as Freedom, pp. 145, 50.
- 10.
Smith, WON, Vol. I, Bk. IV, Ch. ii, p. 475; Vol. II, Bk. V, Ch. i, Part ii, p. 232.
- 11.
Ibid, Vol. II, Bk. IV, Ch. v, pp. 49–50.
- 12.
Ibid, Vol. I, Bk. I, Ch. ii, p. 17, Ch. iv, p. 26.
- 13.
Ibid, Ch. ii, p. 18.
- 14.
Ibid, Ch. x, p. 118.
- 15.
Ibid.
- 16.
Ibid., Ch. ii, p. 18.
- 17.
Ibid, Bk. IV, Ch. iv, p. 478. See also Smith’s TMS, Part IV, Sect. II, Ch. ii, # 17, p. 275.
- 18.
Smith, WN, Vol. I, Bk. I, Ch. i.
- 19.
In 34 years at Ford, including a few years managing in an assembly plant, I never came across the word ‘Fordism’. I only discovered it later in academia, mostly used pejoratively in the social sciences to denote the de-humanising effects of working on assembly lines in the division of labour. From my office in the front of the plant I used to see assembly line workers, men and women, coming to and leaving work each day. They were always laughing and smiling. They often waved or nodded to me as I gazed out the window because they were familiar with my participation in various line-side meetings with plant management. I must say, none of them ever looked de-humanised. They always engaged enthusiastically with plant management over their participation in improvements to work processes.
- 20.
Smith, WN, Vol. I, Bk. IV, Ch. ii, p. 475.
- 21.
Ibid, Vol. II, Bk. V, Ch. i, Part II, Art. iii, pp. 302–3.
- 22.
Ibid, Vol. I, Bk. I, Ch. x, Pt. ii, p. 142.
- 23.
Ibid., Ch. i, p. 13.
- 24.
Ibid, Vol. II, Bk. V, Ch. i, Part III, Art. ii, pp. 302–6.
- 25.
This global division of labour trend is not one-sided. India is rapidly becoming a highly sought-after knowledge worker source, particularly in IT enterprises.
References
Mandeville, Bernard. 1988. The Fable of the Bees, or, Private Vices, Publick Benefits. Liberty Classics: Indianapolis.
Smith, Adam. 1950. An Inquiry into the Nature and Causes of the Wealth of Nations, ed. Edwin Cannan, 6th ed. London: Methuen.
———. 2001. The Theory of Moral Sentiments, ed. Knud Haakonssen. New York: Cambridge University Press.
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Dawson, L. (2023). Smith’s Laissez Faire Capitalism. In: A Business Leader’s Guide to Philosophy. Springer, Cham. https://doi.org/10.1007/978-3-031-33042-1_3
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