What is invisible is the outcome of one’s own inner nature manifested in outer self-order. In TMS, he employs this metaphor to describe the inner or impartial observer within each of us, guiding our moral sentiments. Smith first used the term in his writing on Astronomy to explain natural phenomena. It is crucial to recognize that his analogy of the “invisible hand”, which many economists simply identify as the invisible hand of the market, is actually not just outside of individuals but within them. His “invisible hand” is the systemic unintended consequence of individual action, not as an external force, but as an inner morality within each person that aligns with their human nature.
Smith did not advocate a single-minded pursuit of profit but rather believed that individuals, in pursuing their own self-interest, would unintentionally contribute to the greater social good of society. In the 21 st century, we need to move beyond the narrow perspectives into a holistic assessment of this quintessential moral philosopher of commercial society.Ī common misunderstanding of Adam Smith’s ideas lies in the narrow interpretation of “self-interest” as synonymous with profit. Viewing Smith’s ideas through the narrow lens of modern economics as selfishness versus altruism not only oversimplifies his profound reflections but also diminishes his significance as a font for business ethics. But a deeper reading reveals that the two works complement rather than contradict. His two seminal works, The Theory of Moral Sentiments (TMS 1759) and The Wealth of Nations (WN 1776) appear to diverge in subject matter: morality versus self-interest.
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The University of Glasgow Professor Adam Smith is more associated with free markets and national wealth than moral values. On 5 June 2023, we celebrate the 300th anniversary of the birth of the father of modern economics.
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