Smith asks, ‘What benefits or what misfortunes to mankind may hereafter result from great events, no human wisdom can foresee. By uniting the most distant parts of the world to relieve one another’s wants, to increase enjoyment and encourage industry the general tendency would seem to be beneficial.’
DEFINING IDEA…
Five enemies of peace inhabit with us - avarice, ambition, envy, anger and pride; if they were to be banished, we should infallibly enjoy perpetual peace.
~ FRANCESCO PETRARCH, ITALIAN SCHOLAR
For a start, I find it hard to accept that no human wisdom can foresee the benefits or misfortunes of certain choices and events. There were, for example, plenty of people who predicted the financial crisis that began in 2007, but they were inside the industry. As such, they were part of the problem, not the solution, and even if one or two genuinely warned of impending disaster, it’s highly unlikely the powers that be, the ones reaping huge financial rewards, wanted to listen. Surely someone in China’s elite figured that a traditional preference toward male children, coupled with a one-child family policy, might cause a serious gender imbalance?
Smith specifically related his comments to what he refers to as the two greatest and most important events recorded in the history of mankind: the discovery of America and the passage to the East Indies by the Cape of Good Hope. Yet even Smith, with his optimistic exuberance for capitalism, recognises that advancement and prosperity are not shared by all:‘The policy of Europe has very little to boast of… Folly and injustice seem to have been the principles which presided over and directed the first projects of establishing those colonies;
the folly of hunting after gold and silver mines, and the injustice of converting the possession of a country whose harmless natives, far from having ever injured the people of Europe, had received the first adventurers with every mark of kindness and hospitality.’
I understand Smith’s passion for a free market economy. On many levels, it is a solid and sound system: those who are not afraid of hard work and want to better their position, providing more for their family, should be encouraged to do so. Increasing business efficiencies and delivering a product or service to a willing market is essential. As a result, a social and economic system should always reward effort. But when is enough, enough?
Profiteering at the expense of other human beings is not acceptable, not in Smith’s time and not today, but sadly, as he himself points out, ‘Whenever there is great property, there is great inequality. For one very rich man there must be at least five hundred poor.’ Whether we like it or not, admit it or not, that inequality will never alter while we choose to ignore it when it suits us.
HERE’S AN IDEA FOR YOU…
There’s no evidence that companies that grow rapidly do better than those who don’t. If you run a business, your role in society is far greater than just the generation of revenue: you support communities and provide jobs and stability for others. Instead of focusing on growth, turn your attention to profitability, quality, improved customer experience and increasing staff morale and then enjoy the business you’ve created.