Adam Smith is our guide to perhaps the most
pressing dilemma of our time: how to make a capitalist economy more humane and more
meaningful. He was born in Scotland in Kirkcaldy – a
small manufacturing town – near Edinburgh in 1723. He was a hard working student and very close
to his mother. He then became an academic philosopher, wrote
a major book about the importance of sympathy and lectured on logic and aesthetics. He was also one of the greatest thinkers in
the history of economics – in part because his concerns went far beyond the economic.
He wanted to understand the money system because his underlying ambition was to make nations
and people happier. Smith remains an invaluable guide to four ideas: When one considers the modern world of work, two facts stand out:
– modern economies produce unprecedented amounts of wealth.
– many ordinary people find work rather boring and (a key complaint): meaning-less. The two phenomena are in fact intimately related,
as Adam Smith was the first to understand through his theory of specialisation. He observed that in modern businesses, tasks
formerly done by one person in a single day could far more profitably be split into many
tasks carried out by multiple people over whole careers. Smith hailed this as a momentous
development: he predicted that national economies would become hugely richer the more specialised
their workforces became. One sign our world is now so rich, Smith could
tell us, is that every time we meet a stranger, we’re unlikely to understand what they do.
The mania for incomprehensible job titles – Logistics Supply Manager, Packaging Coordinator,
Communications and Learning Officer – prove the economic logic of Smith’s insight. But there is one huge problem with specialisation:
meaning. When businesses are small and their processes contained, a sense of helping others
is readily available. But when everything is industrialised, one
ends up as a tiny cog in a gigantic machine whose overall logic is liable to be absent
from the minds of people lower down in the organisation. A company with 150,000 employees
distributed across four continents, making things that take five years from conception
to delivery, will struggle to maintain any sense of purpose and cohesion.
So Smith discerned that bosses of the specialised corporations of modernity therefore have an extra responsibility to their workers: to remind them of the purpose, role and ultimate
dignity of their labour. Smith’s age saw the development of what we’d now call consumer capitalism. Manufacturers began turning out luxury goods for a broadening middle class. Some commentators were appalled. The philosopher
Jean-Jacques Rousseau wished to ban ‘luxury’ from his native Geneva. He was a particular
fan of ancient Sparta and argued that his city should copy its austere, martial lifestyle. Disagreeing violently, Smith pointed out to
the Swiss philosopher that luxury consumerism in fact had a very serious role to play in
a good society – it generated the surplus wealth that allowed societies to look after
their weakest members. Consumer societies, despite their frivolity, didn’t let young
children and the old starve, for they could afford hospitals and poor relief. So Smith defended consumer capitalism on the
basis that it did more good for the poor than societies devoted to high ideals. That said,
Smith held out some fascinating hopes for the future of capitalism. He didn’t want
it to stay stuck at the frivolous level forever. He observed that humans have many ‘higher’
needs that currently lie outside of capitalist enterprise: among these, our need for education,
for self-understanding, for beautiful cities and for rewarding social lives. The hope for the future is that we’ll learn
to generate sizeable profits from helping people in truly important, ambitious ways.
Properly developed, capitalism shoudln’t just service our basic material needs while exciting
us to buy frivolous things. It should make money from goods and services that deliver
true fulfiflment. Then as now, the great question was how to get the rich to behave well towards the rest
of society. The Christian answer to this was: make them feel guilty. Meanwhile, the radical, left-wing answer was
then and is now: raise taxes. But Smith disagreed with both approaches: the hearts of the rich
were likely to remain cold and high taxes would simply lead the rich to flee the country. He proposed that, contrary to what one might
expect, it isn’t money the rich really care about. It is honour and respect. The rich
accumulate money not because they are materially greedy, but primarily in order to be liked
and approved of. So rather than taxing the rich, governments
should understand the vanity at the heart of the rich and their motivations. They should therefore give the rich plenty
of honour and status – in return for doing all the good things that these narcissists
wouldn’t normally bother with, like funding schools and hospitals and paying their workers
well. As Smith put it, “The great secret of education is
to direct vanity to proper objects.” Big corporations feel very evil to us now,
the natural targets of blame for low-paying jobs, environmental abuse and sickening ingredients. But Adam Smith knew there was an unexpected,
and more important, element responsible for these ills: our taste. It’s not companies
that primarily degrade the world. It is our appetites, which they merely serve. As a result, the reform of capitalism hinges
on an odd-sounding, but critical task: the education of the consumer. We need to be taught
to want better quality things and pay a proper price for them, one that reflects the true
burden on workers and the environment. A good capitalist society doesn’t just offer
customers choice, it also teaches people to exercise this choice in judicious ways. Capitalism
can, Smith suggests, be saved by elevating the quality of consumer demand. The economic state of the world can seem at once so wrong and yet so complicated, we end
up collapsing into despair and passivity. Adam Smith is on hand to lend us confidence
and hope. His work is full of ideas about how human values can be reconciled with the
needs of businesses. He deserves our ongoing attention because he was interested in an
issue that has become a leading priority of our own times: how to create an economy that
is at once profitable and civilised.


59 Responses

  1. Sector 7 G

    May 26, 2019 2:58 pm

    One of the most misunderstood and misrepresented philosophers in history. The man never used the the Word Capitalism. Capitalism is a leftist pejorative for the Free Market. The Free Market works quite well without leftist propaganda mucking it up with their ignorance of history and human nature. Look it up. Adam Smith is the father of The Free Market Economy, not Capitalism.

  2. Foong Lim

    June 3, 2019 6:19 pm

    Agreed with his ideology except the part of how to treat the rich… The rich ones tends to power abuse while gaining possession and reputation in most of the time…

  3. Khurmiful

    June 13, 2019 8:43 pm

    Number 4: how smith got that one wrong. Companies would do anything to control consumer buying habits. Educating consumers? He had a rather high regard for companies, which is misplaced.

  4. Chapter by Chapter

    June 17, 2019 5:01 pm

    This dude had some great ideas! If you wanna learn more, we've summarized every chapter of The Wealth of Nations

  5. D Cade Sivertsen

    June 28, 2019 9:42 pm

    Adam Smith is truly one of the greatest philosophers and economists of all time. His ideas may have taken more lives out of poverty than anything else.

  6. Diego Ponciano

    July 10, 2019 1:30 am

    Exactly, finally great content to consume on Youtube 🙂 keep it up thank you for this amazing videos.

  7. Bundle of Perceptions

    July 13, 2019 3:50 pm

    Adam Smith wanted to make Capitalism more humane, which means it wasn't humane from the beginning. Only a complete moron wouldn't expect the Capitalists to revert back to the original inhumane form of Capitalism eventually. Now our economy is part Capitalism and part Feudalism. Humans lack the morals and intelligence to make any kind of economic system work properly and humanly.

  8. Luke Passos

    July 22, 2019 3:40 am

    Adam Smith was a true hero, Jesus. I didn't know he was so morally noble in his beliefs.

  9. David Romero

    July 24, 2019 11:04 pm

    I liked the video, but I am not sure about the subscribed motivations of Christians to "guilt" the rich.

  10. Jerry Samuels

    July 27, 2019 2:27 am

    Adam Smith sounds like an uncommon fool. Because there is no such thing as capitalism. Capitalism is a ruse.

    Capitalism is a fraud. Capitalism does not exist. Colonialism or slavery or genocide always precede "capitalism".

    Colonialism or slavery or genocide always kick-start "capitalism". Capitalists are nothing more than parasites.

    Capitalist always need a host. And without one no so-called "capitalist" exist.

  11. Pavl Rakopv

    July 27, 2019 11:36 pm

    Good God… the financial capitalists of the world will want to silence this guy and anything he has to say…. Quick, get rid of him !!!

  12. Balanced Stereo

    July 28, 2019 9:13 pm

    Doing a Progressive Tax on (Just) the “Greedy Part” of Wealth & Conservatively Spending (Just it) on Social Programs gets us a “Stable Society” (the “True Creator” of All Wealth!!) AND we do it with “Direct Democracy” where WE Directly Propose, Enact & Enforce “Merit Based Standardized” Laws & “Money” isn’t a factor!! – "Like" this so we all See & Do this!!

  13. St Na

    July 31, 2019 3:58 pm

    Η ματαιοδοξία ως παράγων προώθηση της ευημερίας των ανθρώπων. Θα το έλεγες ανόητο. Κολακεύοντας τους ισχυρούς κερδίζεις κι εσύ. Εκτός αν είσαι τόσο εξαθλιωμένος που η γνώμη σου είναι εντελώς αμελητέα για τον πλούσιο.
    Πάντως κολάκευε! Χαχαχα!

  14. Akram Bedoui

    July 31, 2019 4:25 pm

    I wonder what you may think of yourselves 5 years after you put Donald J. Trump in the video

  15. Ashkan Keramati

    August 7, 2019 11:07 pm

    Again as i expected you missed a very important idea of smith: private vices, public benefits.
    And his other important ideas like invisible hand or theory of moral sentiments
    Shame on you

  16. Stanford Leeham

    August 10, 2019 1:42 pm

    Share with tangible profits and benefitable people in the world even they are poor countries. The life is avablible with education

  17. Corto Maltese

    August 11, 2019 12:41 pm

    Christianity is not preaching "guilt " against rich, quite opposite. It says that you must make best of your life and be prosperous but in same time to help each other and to the poor. New Testament says not be greedy over other people and to take advantage of them. Not to be evil , rather to succeed of your own work and to help the poorest.

  18. Leslie Tanner

    August 13, 2019 3:21 am

    This will not be taught in our schools. Nothing good is
    allowed to be said of a capitalist. In fact, nothing good
    is allowed to be said of a Christian, a conservative, the
    white race, Western Culture, etc.
    Blacks for Trump!

  19. Nana Nana

    August 16, 2019 6:00 pm

    Your veiw on Christianity is wrong…. Read the story of the "talents" Matthew 25:14-30 (from the Bible – New Testament) .

  20. All R Libz

    August 24, 2019 7:18 pm

    So basically capitalism is just a manipulation of our minds were tricked into desiring things we don't really need.

  21. Alliam Isaman

    August 25, 2019 4:47 pm

    Well Mr Smith aren't we so full of shit? The government shouldn't tax the rich but instead it should understand the key to their heart you say? Lol what a fucking fraud! I bet the few hundred dollars that I have in my account the rich paid you to make such an absurd statement. I would love not to be taxed but have IRS look into my heart instead lol. Besides Mr Smith you claim that companies aren't responsible for our taste and that their role is merely to serve that taste of ours? Well I beg to differ. Take a look at the ads we are bombarded with 24/7 and tell me if the companies only role is to fulfill our tastes. The truth is Mr Smith, showing a picture of a group of good looking, youngsters all smiling around the fire on the beach having the time of their lives then entailing the picture with a brand of cigarettes is clearly shaping the taste of people not serving it. How else can you explain the use of celebrities in advertisement? By that same flawed logic of yours Mr Smith drug cartels and prostitution rings should be allowed to operate freely for they only cater to the taste of people and not influence it. Mr Smith shut the fuck up!

  22. Mayara Batista

    August 31, 2019 1:04 pm

    this video made me become a lot more interest in adam's work, his vision seems very different from what I supposed it was, looking forward to learn more about his studies.

  23. Mark Freeman

    September 16, 2019 3:57 pm

    Adam Smith was an intellectual titan, though he is often misunderstood and misrepresented by his followers, as many great thinkers are, like John Maynard Keynes.

  24. kingogkingswoodz

    September 18, 2019 3:42 am

    The greatest man possibly in history. Also "consumerism" is half the story. The other half is producerism. Lol. The same people consuming are also producing…well unless you work for government of course.

  25. Frederick Röders

    October 4, 2019 7:03 pm

    If only Smith and Marx met eachother and formed a duo. They both have answers for problems the other couldnt quite solve.
    You however cant make capitalism more humane. Profit maximization doesnt allow for that.

  26. allgoo 19

    October 14, 2019 3:24 am

    If you think the "free market"(symbolized by "invisible hand") was the main theme of the book "The wealth of nations", you've never read it.

    In fact, if you are not careful enough, you'll skip the word without even noticing it.

    Smith supports the idea of "progressive taxation" when the word didn't even exist(not even income tax).
    Smith emphasizes importance of public education.


Leave a Reply