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 near Edinburgh in 1723. A hardworking student, he became an academic philosopher and wrote a major contribution on the importance of sympathy and logic. But perhaps how we know him today is towards his major contributions in the field of economics.
Smith 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. Continue reading