Observations on Employee Ownership
A Different Lesson from Adam Smith
June 1, 2011A lot more people have invoked Adam Smith than have read him (and I admit it was in college, and only under duress, that I last did). Maybe that is why the invokers almost always focus on his ideas about the marketplace's invisible hand but not Smith's other ideas about society.
Smith was more complicated than commonly assumed. While he strongly argued that a system in which people pursued their own economic self-interests would be best for everyone, he also believed that the mindless pursuit of wealth for its own sake, even at the cost of making others poorer, was a dangerous idea.
Consider these quotes, for instance:
"No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable."I suspect that Smith then may have found employee ownership a terrific idea, and would have been dismayed at an economic system where the distribution of economic benefits becomes ever more skewed. Some people (starting with Louis Kelso and including me) have described employee ownership as a combination of the best of Smith and Karl Marx. But maybe we can simply say it's what Smith would have liked all along.
"With the greater part of rich people, the chief enjoyment of riches consists in the parade of riches."
"To feel much for others and little for ourselves; to restrain our selfishness and exercise our benevolent affections, constitute the perfection of human nature."