The Sustainabilist View of Capitalism Leading With a Renewed "Invisible Hand”

Nils-Michael Langenborg Founder & Executive Director

The Sustainable Adam Smith @GreenAdamSmith

nils-michael@thesustainableadamsmith.org

October 7, 2013

Who is Adam Smith?

Born June 16, 1723

Died July 17, 1790 (age 67)

Scottish social philosopher

Collaborated with David Hume

Part of the Scottish Enlightenment

Professor of Moral Philosophy at University of Glasgow

Pioneer of “political economy” (the study of production)

Lived with his mother his entire life

What did Adam Smith write?

1776 1759

Four Key Principles; One Shared

Theory of Moral Sentiments

“self-love”

“man w/in the breast”

“approbation”

“the invisible hand”

Wealth of Nations

“consumption”

“division of labor”

“self-interest”

“the invisible hand”

The Wealth of Nations

➡  An Inquiry into the Nature and Causes of

the Wealth of Nations

➡  Foundation of free market capitalism

➡  Four basic principles emerged

“consumption”

“division of labor”

“self-interest”

“the invisible hand”

1. Consumption

“Consumption is the sole end

and purpose of all production;

and the interest of the producer ought to

be attended to only so far as it may be

necessary for promoting that of the

consumer.”

2. Division of Labor

“The greatest improvement in

the productive powers of

labour… seem to have been the

productive effects of the

division of labour.”

1 pin = 18 different steps 1 man = 20 pins a day 10 men = 4,800 pins a day/each; 48,000 vs. 200 pins/day

3. Self Interest

“It is not from the

benevolence of the butcher,

the brewer or the baker, that

we expect our dinner, but

from their regard to their own

interest.”

4. Invisible Hand

“…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.”

The Capitalist View of Capital

Financial Natural Human

“Consumption is the sole end and purpose of all production”

Will we make money?

Do we have the resources?

Who will we get to buy it?

-- Wealth of Nations (1776)

Isn’t there more to Adam Smith?

The Theory of Moral Sentiments

➡  Published 1759 (17 years before WN)

➡  Might be the foundation for leading

“sustainable capitalism” into the future

➡  Four basic principles emerged

“self-love”

“man within the breast”

“approbation”

“the invisible hand”

1. Self-Love (The Impartial Spectator)

“When the happiness or misery of others

depends in any respect upon our conduct,

we dare not, as self-love might

suggest to us, prefer the interest of

one to that of many.”

2. Man Within The Breast (self-command)

“It is he who, whenever we are about to act

so as to affect the happiness of others, calls

to us, with a voice capable of astonishing the

most presumptuous of our passions, that we

are but one of the multitude, in no

respect better than any other.”

3. Approbation (approval)

“In the steadiness of his industry and frugality,

in his steadily sacrificing the ease and

enjoyment of the present moment

for the probable expectation of the

still greater ease and enjoyment of

a more distant but more lasting

period of time...”

4. The Invisible Hand

“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,

advance the interest of society, and

afford means to the multiplication

of the species.“

The Sustainabilist View of Capital

Natural Human Financial

“The produce of the soil maintains nearly that number of inhabitants which is it capable of maintaining.“

How does it effect us?

Do we have the resources?

How do we value it?

-- The Theory of Moral Sentiments (1759)

The Necessaries of Life

1.  Family (population) 2.  Food & Shelter (the basics)

3.  Contribution (aka “work”)

4.  Capital (natural and human) 5.  Health (personal and environment)

6.  Exchange (currency)

7.  Technology (as enabler of others)

Natural Human Financial

A Necessary of Life

Food

Natural Human Financial

“To make nearly the same distribution of food had the earth

been divided into equal portions among all its inhabitants and thus

afford means to the multiplication of the species.”

How does it effect us?

Do we have the resources?

How do we value it?

Nils-Michael Langenborg Founder & Executive Director

The Sustainable Adam Smith @GreenAdamSmith

nils-michael@thesustainableadamsmith.org

October 14, 2012

Leading With Two Hands

Capitalist

Sustainabilist