Is Adam Smith The Founding Father Of Sustainability
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Is Adam Smith The Founding Father of Sustainability? Nils-Michael Langenborg Founder & Executive Director The Sustainable Adam Smith #GreenAdamSmith April 24, 2012
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We examine Adam Smith's seminal works, The Wealth of Nations (1776) and The Theory of Moral Sentiments (1750) and compare the two books. We uncover the differences between the two books and expose a more complete review of The Wealth of Nations to demonstrate Smith's original theories have been omitted in most financial transactions and economic texts.We look at the Capitalist view of capital and the Sustainabilist view of capital to note their theoretical and practical differences.Smith is shown as more than just an "economist" and found of modern economics, but as a complete thinker who views the three forms of capital (natural, human and financial) as inexorably linked to each other.
Transcript of Is Adam Smith The Founding Father Of Sustainability
Is Adam Smith The Founding Father of Sustainability?
Nils-Michael Langenborg Founder & Executive Director
The Sustainable Adam Smith #GreenAdamSmith
April 24, 2012
Rules of Conduct
This is not about me
This is not about you
This is about us
Our Agenda
Lecture (Q&A)
The Capitalist View of Capital
The Sustainabilist View of Capital
Assignment – The Necessaries of Life
Final Thoughts
Who am I?
Who are you?
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 do?
1776 1759
The Wealth of Nations
➡ An Inquiry into the Nature and Causes
of the Wealth of Nations
➡ Four basic principles emerged
“consumption”
“division of labor”
“self-interest”
“the invisible hand”
➡ Foundation of free market capitalism
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.”
1. Consumption
But in the mercantile system the interest
of the consumer is almost constantly
sacrificed to that of the producer; and
it seems to consider production,
and not consumption, as the
ultimate end and object of all
industry and commerce.”
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.”
Questions?
The Theory of Moral Sentiments
➡ Published 1759 (17 years before WN)
➡ Four basic principles emerged
“self-love”
“man within the breast”
“approbation”
“the invisible hand”
➡ Might TMS be the foundation for
“sustainable capitalism” in the future?
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.
The man within immediately calls to us,
that we value ourselves too
much and other people too little,
and that, by doing so, we render ourselves
the proper object of their contempt.”
2. Man Within The Breast (self-command)
“It is reason, principle, conscience,
the inhabitant of the breast, the
man within, the great judge and
arbiter of our conduct.
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,
the prudent man is always both
supported and rewarded by the
entire approbation of the impartial
spectator, the man within the breast.”
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 it,
advance the interest of society, and afford
means to the multiplication of the species.“
Questions?
The Capitalist View of Capital
Financial Natural Human
“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.”
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.“
Questions?
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 necessaries)
Natural Human Financial
Assignment
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.”
Nils-Michael Langenborg Founder & Executive Director
The Sustainable Adam Smith #GreenAdamSmith
April 24, 2012
Final Thoughts
![John Jay: Founding Father by Walter Stahr [Excerpt]](https://static.fdocuments.in/doc/165x107/55336462550346457f8b48ac/john-jay-founding-father-by-walter-stahr-excerpt.jpg)
