The Invisible Hand

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“No society can surely be flourishing and happy of which by far the greater part of the numbers are poor and miserable.” 
Adam Smith

Adam Smith

Adam Smith, born 1723 in Kirkcaldy, Scotland, was destined to write the book that would be considered the first fundamental work of classical economics and one of the most influential books ever written. I confess that I had a vague idea of who he was but paid little attention until I decided to take an economics course.  Adam Smith was the name that came up on the first day of class.

Adam Smith’s ideas were as revolutionary as the age in which he lived. It was the time of the Scottish Enlightenment when the Scots were among the most literate citizens in Europe boasting an estimated 75% level of literacy.   Over a nine year period, he worked tirelessly on his book, “An Inquiry into the Nature and Causes of the Wealth of Nations (usually shortened to The Wealth of Nations),  which was published in 1776, the year the United States adopted the Declaration of Independence.

Adam Smith is best known for his one phrase – “the invisible hand,” which signifies that self-interest guides the most efficient and effective use of resources in any economy.  He argued that each of us tries to gain wealth, but we must exchange what we own or produced with others who sufficiently value what we have to offer.  Hence, by division of labour and a free market, the public interests are rewarded.

Adam Smith has been given the well deserved title “Father of Economics.” He once said that “Wherever there is great property, there is great inequality.”  His understanding of economy was framed by his profound belief in the value of individual effort.

“… the typical worker who through the whole of his life…pursues the idea of a certain artificial and elegant repose which he may never arrive at, for which he sacrifices a real tranquility…It is this deception which rouses and keeps in continual motion the industry of mankind.” 
 Adam Smith

The Man from Wales

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“Women will be no longer made the slaves of, or dependent upon men…They will be equal in education, rights, privileges and personal liberty.”

Robert Owen, (1771-1858) Book of the New Moral World: Sixth Part, 1841

Scotland

Robert Owen was a change agent, by words and actions.  Born in Newtown, a small market town in Montgomeryshire, Wales, he became a social reformer and one of the founders of utopian socialism and the cooperative movement. He believed that when people cared about each other it would generate extraordinary outcomes for society.

At the young age of 29, Robert was part-owner of a Manchester cotton mill.  Soon he took over cotton mills in New Lanark in Scotland.  His priority was the workers whose livelihoods depended upon employment within his mills.  He enhanced their housing and sanitation, provided medical supervision, and set up a cooperative shop that sold provisions near cost.  His greatest dream was to educate children.  He established the first infant school in Great Britain based on his deeply held belief that improved circumstances would act as a beacon of hope.

Robert’s ideas remain remarkably relevant for us today.  In his words, “To train and educate the rising generation will at all times be the first object of society, to which every other will be subordinate”. (The Social System, 1826)

Robert’s life was dedicated to building a fairer society where all could live without fear of hunger or want, secure in the knowledge that their children would be educated and that their efforts would be valued.  Both Karl Marx and Friedrich Engels paid tribute to Robert, as the man who gave them the basis for their theories.

“Eight hours’ daily labour is enough for any human being, and under proper arrangements sufficient to afford an ample supply of food, raiment and shelter, or the necessaries and comforts of life, and for the remainder of his time, every person is entitled to education, recreation and sleep”.

From the Foundation Axioms of Owen’s “Society for Promoting National Regeneration”