Who was the father of capitalism?

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Capitalism was born with the modern economy. His noble father is the Scottish philosopher Adam Smith (1723-1790), who left a work destined to change the world to posterity: Investigation of the nature and cause of the wealth of nations (1776). Five volumes that attempted to answer a central question of modernity: what relationship and state must they have?

What philosopher are you? Find out with a test capitalism, economy, market, social equity, inequalities Adam Smith, according to the Scottish philosopher According to him a society prospered only if each pursued his own personal interest, because on the sum of the individual interests he then supervised a "providence": the invisible hand of the market that governs everything. | WikiMedia

State and market. As we have described in detail in the (far) number 90 of Focus History (April 2014) the philosopher's answer was: none, or almost. Because left free to act, and governed by a sort of "providence", the market triggers a virtuous circle capable of producing wealth for all.

Enlightenment, involved in the fervent debate of his years, Smith lived the transformations of the first embryonic industrial revolution. He lived in a reality made up of small expanding economic centers, great certainties and cumbersome political and religious hierarchies (it was the century of the crisis of the monarchies, in France swept away by the Revolution of 1789).

Smith noted how the gold business of the India Company - the commercial arm of the British Empire - was the offspring of a modern culture and a monopolistic vision: it threw itself against caste, lobby and conflicts of interest, invoking a free market .

Freedom I am looking for … Like all Enlightenment scholars, Smith wanted the center of freedom - of men and of thought. He then elaborated his prophetic intuition: the political sphere, he said, cannot be released from the economic dimension, and even less from the ethical one. At the center of the debate was then to put "the problem of problems": how to produce wealth for the community (today we would say how to make the economy grow), and above all … Why? For what purpose?

So many selfishness, so much well-being. The question was enormous: it was a question of defining the intended use of money, just when the money started to run. Smith opted for a solution in which the state refrained from intervening. According to him, a society prospered only if each pursued his own personal interest, because on the sum of the individual interests there then supervised a "providence": the invisible hand of the market that regulated everything.

So upstream from society there would be so many egoisms. But can so many selfishness make everyone happy? That is to say, can we stay in a capitalist model and consider everyone's needs?

Smith thought so. According to him, man is endowed with empathy. That is, he puts himself in the shoes of others to understand how to behave. The capitalist model, managed by men who are naturally attentive to others, would therefore have benefited the well-being of all.

capitalism, economy, market, social equity, inequalities The Crystal Palace in London where the Great Exhibition was held in 1851, at the height of the industrial revolution. | J.Mc Neven / WikiMedia

Denied by the facts. When the Industrial Revolution came to fruition, a century later, however, contradictions emerged that neither he nor the previous philosophers had imagined.

In the second half of the 19th century it was realized that the economy had grown, but economic growth had accentuated social inequalities and injustices.

The economy and wealth of nations, unlike what Adam Smith had hoped, did not guarantee happiness. Nor did they ensure that the moral improvement of man that the Enlightenment philosophers had theorized.

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And today? The thought of Adam Smith in the twentieth century was taken up by the Austrian economic school and then by that of Chicago, which inspired the neoliberal deregulation of the 1980s. But any direct attribution between modern politics and the Scottish philosopher is, according to many scholars, undue.

More than an economist it could then be said that Smith was a moral philosopher. A man who cared about a (still today) central problem, a child of modernity: how to reconcile the economy and the development of the individual?