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The progress of the last two hundred fifty
years has been explosive. Year after year,
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the world and its people have grown more connected
and more prosperous. It seems unimaginable.
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And yet, a man who lived in a world of sailing
ships and horse drawn carriages, of great
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wealth, and great poverty, imagined our very
world. He set pen to paper and recorded the
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ideas that would revolutionize the world's
marketplaces.
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Free markets and global trade have created
more prosperity, and for more people, in the
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past two hundred years, than was created in
the previous two thousand years. We are living
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longer and more comfortably than the vast
majority of people who ever lived.
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But in todays' seemingly ruthless competitive
environment, where the stakes are high and
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winning is the name of the game; can an ethical
and honest business still prosper?
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Has the global economic system become so big
and complex, that morality and human empathy
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are no longer relevant? Where insiders and
the rich get richer and the middle class and
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the poor get poorer and the free market is
no longer "free"?
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I'm Johan Norberg, a writer and an analyst,
born and raised in Sweden, and these issues
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are of great concern to me. Therefore, I'll
take a new look at the ideas of the man many
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consider to be the father of the modern world.
He was a Scotsman named Adam Smith: a moral
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philosopher, a bold voice of the Scottish
Enlightenment and the world's first economist.
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He recorded his revolutionary ideas in two
remarkable books: The Theory of Moral Sentiments
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and The Wealth of Nations.
Those ideas changed the world and in the next
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hour we'll explore how they continue to power
our world today.
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Funding for this program has been provided
by: John Templeton Foundation and Templeton
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Religion Trust.
The Maersk Mc-Kinney Moller is one of the
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largest ships in the world. It is also one
of the most modern cargo carriers on the oceans
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today, carrying Adam Smith's ideas on world
trade to a level imagined by only one man.
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"By opening a more extensive market for ... the
produce of their labour... it encourages them
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to improve productive powers... and thereby
to increase the real revenue and wealth of
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the society."
In command of the huge ship is Captain Jes
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Meinertz, a 25-year veteran of the sea-lanes.
You see the vessels getting bigger and bigger;
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you have seen an increasing volume of cargo
going from one port to another port... and
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I think that trend will continue.
The massive scope of international trade today
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would have been unimaginable even a few decades
ago. But Adam Smith foresaw the workings of
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such a world more than 200 years ago. He wrote
that free markets and free trade would connect
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the continents and result in global prosperity.
Today's markets have grown to global proportions
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and revenue and wealth have soared: just one
way that Adam Smith's ideas continue to change
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the world.
Captain Meinertz and his crew are on a journey
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that will take them over twelve thousand nautical
miles from Shanghai to three more stops in
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mainland China, Hong Kong and then through
the Suez Canal.
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Now, after 20 days at sea, they are nearing
Algeciras, Spain. Then it will be on to Rotterdam
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and other European ports. The economic facts
of life in the cargo business mean that bigger
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is better. Size is everything.
The Maersk Mc-Kinney Moller is over twenty
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stories high and 1,300 feet long. This ocean-going
behemoth carries 18,000 containers. If they
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were loaded aboard a train, the train would
be 68 miles long
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The containers hold everything from fruits
and vegetables to furniture and electronics,
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from appliances and kitchenware to vehicles
and auto parts; a vast variety of consumer
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and industrial goods to feed the growing demand
of a globalized world.
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In China, for example, you have 1.2- 1.3 billion
people and the middle class is growing. And
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of course, they will be consumers like in
the U.S. and like in Europe.
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And, of course that will- that will create
even more demand for goods to be transported
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around the world.
It's early evening when the ship arrives in
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Algeciras, Spain. Now, working through the
night, over 2,500 containers will be offloaded
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within 10 hours. Then, once again, the ship
will be on its way.
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Every day of the year, thousands of container
ships enter hundreds of ports around the world.
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Adam Smith would be amazed: every corner of
the earth is now linked to every other. Each
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day, more people become connected by global
trade. Each day, because of it, life gets
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better for millions of people.
So, who was this man who predicted that trade
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would lead to prosperity? Who foresaw this
global progression out of poverty?
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Smith took ideas of economics that were really
in the bow and arrow stage and made them into
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a modern theory, which actually still drives
our economic thinking today.
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People call him an economist; he was really
a social psychologist. He wrote about ethics,
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he wrote about law, he wrote about politics
and obviously, he wrote about economics.
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The man many consider most responsible for
today's prosperity. Indeed, the father of
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modern economics first made a name for himself
as a young man here, in Edinburgh, Scotland.
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This historic city was then the center of
the Scottish Enlightenment and Adam Smith
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was one of its brightest lights.
He had written an amazing book, The Theory
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of Moral Sentiments, and that had propelled
him into popularity. He would go on to write
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another, which was equally popular and eventually
better known, The Wealth of Nations.
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Together these two books described a powerful
system of guidelines linking morality and
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economics.
Adam Smith was one of the greatest minds of
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all time.
His great gift was observation, and his study
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of human nature as it appeared in different
types of society at different periods of history-
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is absolutely awesome.
Adam Smith was born in 1723, in the small
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seaside town of Kirkcaldy, Scotland, where
he learned about morality and economics at
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the local merchants' market.
He studied at Glasgow University, became its
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top administrator and then a pillar of the
unlikely intellectual revolution called the
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Scottish Enlightenment.
He lived, lectured and socialized in Scotland's
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capital city of Edinburgh.
He had eloquently argued the power of free
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markets and the division of labor, to enable
people at all strata of society to become
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more prosperous.
The institutions that Adam Smith recommended
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have proved- empirically and historically
now- to correlate positively with all of these
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metrics of human well-being.
Smith was particularly concerned about the
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well-being of the least well-off, and thought
that markets, especially the type of commercial
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society he wished to defend, would be of immense
benefit to precisely those people.
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He was the man that gave us modern economics
with concepts like gross national product,
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and productivity, and supply and demand, and
labor, and capital, and all of these things
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we just take for granted today.
Smith matters, because he posed a question
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that every single government since has had
to address. Should governments intervene in
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the management of economies? Should they leave
it to market forces?
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Could market forces- on their own- alleviate
poverty? Smith actually believed that they
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could.
He had lived to see that his revolutionary
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ideas worked, to see life for the average
Scotsman actually improve. And most important
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for Smith, that the poor were beginning to
do better.
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So, do Adam Smith's revolutionary ideas, now
over two centuries old, apply to the poor
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in today's developing world, as they did in
Europe and America in Smith's day? Do they
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still have the power to transform the world?
One success story with a surprising Scottish
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connection is Hong Kong.
For much of its past, Hong Kong had been one
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of the great trading cities on earth. Packed
with thriving businesses, large and small,
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Hong Kong had no natural resources and little
agricultural land... only a beautiful harbor
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and a population of remarkably industrious
people.
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By the 1960s, the colony was crammed with
millions of refugees fleeing the civil war
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in mainland China
Hong Kong was a city hobbled by poverty. There
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were water shortages and thousands of refugee
families called the harbor home.
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But everything would change because of the
vision of one determined man, Sir John James
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Cowperthwaite, Hong Kong's financial secretary
from 1961 to 1971. He was also a Scotsman
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and very much a disciple of Adam Smith.
Sir John Cowperthwaite is one of the great-unappreciated
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heroes of political economy. He implemented,
in Hong Kong, an experiment. He applied his
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theory of what he called benign neglect, so
he instituted in Hong Kong the system of Smithian
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political economy to see what would happen.
Cowperthwaite built a Hong Kong that had relatively
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little corruption, an efficient and independent
judiciary, individual property rights, and
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respect for the rule of law. He instituted
an uncomplicated tax system with low rates
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on both individuals and business. The overall
tax burden was half that of the United States
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at the time.
And he implemented the Smithian system of
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peace, easy taxes, and a tolerable administration
of justice... and look what happened.
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"Little else is requisite to carry a state
to the highest degree of opulence ... but
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peace, easy taxes and a tolerable administration
of justice; all the rest being brought about
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by the natural course of things."
In Cowperthwaite's decade as financial secretary,
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real wages rose by fifty percent. Between
1960 and 2014, Hong Kong's GDP per capita
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adjusted for inflation, increased more than
ten times.
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And they turned what was effectively a rock
in the 1950s to one of the most prosperous
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places on earth today.
Even now, under Chinese rule, Hong Kong remains
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one of the world's most important financial
centers.
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It's proof that with the right policies in
place, change can come quickly. And today,
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the people of Hong Kong, despite continued
unrest and demands for a greater say in their
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future, have a higher income per capita than
their old colonial masters in Britain.
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While Hong Kong- along with Japan and the
other Asian Tigers- was prospering, China
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was stagnating.
Twenty years of Soviet-style centralized planning
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and control had crippled the country.
After Mao died both the Chinese leaders and
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the Chinese people recognized that socialism
didn't work.
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Ning Wang is professor of economics at the
Ronald Coase Institute, and author with Ronald
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Coase of the book How China Became Capitalist.
They tried new ways to organize the economy.
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What emerged was spontaneous, was something
we here recognize as the market economy. And
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in China it's called socialism, with Chinese
characteristics.
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Socialism with Chinese characteristics translates
to change from the ground up or spontaneous
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development. Add to this the power of a market
economy and you have two of Adam Smith's most
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essential concepts.
They gradually opened up the economy, allowed
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private sector to enter in one industry after
another, and of course, once the private enterprises
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entered any sector, they quickly out-performed
state enterprises.
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The small market economy, which leaders had
allowed to even out the rough spots in centralized
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planning, mushroomed. Today, China's private
sector contributes 60 to 80% to the country's
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job growth and 60 to 70% of its GDP.
So, that forced them to resort to their own
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tradition: seeking truth from facts. Be practical.
Be open minded, not trapped by any preexisting
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ideology.
It's estimated that in the last three decades,
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over 600 million people have risen out of
poverty in China. That's an accomplishment
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unmatched anywhere, at any time, on earth.
And today, thousands of young Chinese are
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joining a global movement to discover how
to maximize their nation's potential.
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Tens of thousands of students, from all over
the world, have come to America to study.
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Many of them are here at the University of
Chicago, one of the world's foremost academic
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institutions.
Xingxing Li is a PhD student at the University
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of Chicago Law School and she's studying the
effects of government regulation on the economy.
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And I just wanted to come here and learn from
the best of the best and then return to China
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and help to spread the knowledge to Chinese
students.
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This may be the best place on earth to study
the causes of wealth and poverty: almost thirty
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professors, students, and alumni have won
Nobel Prizes in economics.
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Today, Professor Ning Wang is at the University
of Chicago to preside over a unique seminar.
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These University of Chicago scholars and students
are from China and they've all come together
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for a luncheon and a seminar to explore an
interesting and surprising mix: Adam Smith,
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capitalism, and communist China.
Such a conversation, even their presence here
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in the west, would have been unthinkable just
a few years ago.
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Good afternoon, welcome everyone, and a welcome
to have this seminar, Adam Smith in China.
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And we have a group of scholars, students,
who have expertise on Adam Smith.
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Adam Smith is the first generation of economic
theorist.
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I think classical economics would believe
that like, until [the] market fails, there's
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no need for governmental intervention.
It is the highest impertinence and presumption
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in kings and ministers, to pretend to watch
over the economy of private people."
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Yes market works, but market needs something
like morality. So people will trust each other,
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or at least they want to try to trust each
other.
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Adam Smith not only has one book called, Wealth
of Nations, he also has another great book,
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called The Theory of Moral Sentiments, and in that
book he really lays out what kind of morality
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standards should the people have when they
have the market kind of exchange.
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I think they were surprised, happily surprised
that actually what they got from Adam Smith
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actually consistent with their own tradition,
traditions from Confucianism and traditions
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from Taoism.
Chinese students are not just studying Adam
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Smith in the west... they're studying him
in China. All of the major Chinese universities
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teach the ideas of Adam Smith. And they are
learning how their own traditions are similar
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to those of the west.
It doesn't surprise me at all that more people
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in China read Adam Smith, than, you know,
people here in the States.
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The previous Chinese Premier, Wen Jiabao,
on many occasions praised The Theory of Moral
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Sentiments, and I remember once, he- visiting
a Chinese campus, and in front of students,
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he raised that book, "Hey guys, you have to
read this book, The Theory of Moral Sentiments."
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Is China coming full circle? Will it once
again embrace its cultural roots, with a deeper
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understanding of how its history and commercial
traditions merge naturally with the ideas
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of Adam Smith and contemporary market economics?
Is communism the future of China, or will
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it be seen as just an aberration, a blip,
in China's long history?
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But for China to move forward it has to strengthen
its own innovative capacity.
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The most severe defect of the Chinese system
is that China now has an open market for goods,
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but doesn't have a free market for ideas.
A free market not only opens our minds to
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new ideas, it helps us to be far more productive.
From thousands of independent suppliers around
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the world, millions of parts have been shipped
to Airbus in Toulouse, France.
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Here they will be assembled into the largest
and most modern airliner on earth... a product
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of the vast benefits of a global division
of labor, a concept popularized by Adam Smith.
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"The division of labor, so far as it can be
introduced, occasions in every art, a proportional
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increase of the productive powers of labor."
Few things better illustrate the benefits
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of the division of labor, than factories like
this. Smith would have been amazed.
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What was an extraordinary insight in Smith's
day; the productive potential of the division
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of labor is now a commonplace, common sense
global phenomenon.
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Here we are in our mockup hall here in Toulouse;
we have full size models of the major models
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that we produce for Airbus.
Alan Pardoe is the head of marketing communications
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at Airbus in Toulouse, France.
They're fully furnished so they have seats
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and galleys and furnishings just like a real
airplane. If you like, it's sort of a showroom.
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We are many thousands of people in Toulouse,
but we are of course a global company, we're
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not just French.
So an A380 is a very big airplane; in fact,
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it's the world's largest commercial airplane.
And what really distinguishes it- is the fact
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that it's got two decks, two levels, two cabins.
And it's an airplane that probably has something
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in the order of four million individual parts.
Two and a half million of those are unique
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part numbers. We must have something in the
order of 1,500 suppliers in probably about
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30 countries.
And each of those suppliers does what they
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do best. They specialize in their own area
of expertise.
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The wings are constructed in England and each
contains 32,000 individual parts.
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The wing is enormous; it's huge. The wingspan
of this airplane is about 80 meters. That's
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something in the order of 250 feet, so it's
bigger than almost every other airplane ever
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flown, and certainly the largest commercial
airplane flown.
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Smith first described the division of labor
by looking at the manufacture of simple pins.
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We've come a long way since, but the principle
is still the same: the larger the scale of
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the cooperation, the greater the chance of
specializing.
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I think for one company to try to do everything
on its own would be prohibitively expensive
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in terms of just not money, but resource,
people... know-how. It's a global business.
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People fly around the world day in, day out.
It's a global supply business. It's a global
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manufacturing business.
You concentrate on doing the things that you're
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good at. I concentrate on doing the things
that I'm good at, and then we exchange, and
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then we're both really much, much better off,
because we're very much more efficient.
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What we see in the world today in a globalized
economy is millions, indeed, billions of people
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who are cooperating with one another in innovative
new ways around the world. In some sense,
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that really is the Adam Smithian world
With incredible machines like these, we can
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travel from one continent to the other, supported
by a vast network of millions of people and
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thousands of systems that keep everything
up in the air.
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And while we're flying, tons of freight is
traveling with us in the cargo holds.
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But by far, most products traded between nations,
still travel, as they did in Smith's day...
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on the seas.
With every one of the allotted containers
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unloaded in Algeciras, the Maersk Mc-Kinney
Moller is ready to depart.
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A cargo ship rests at its dock only long enough
to unload and load. At most ports, the crew
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never leaves the ship.
Before dawn, with the moon setting behind
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the mountains, she heads into the crowded
Strait of Gibraltar.
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I would say that's a favorite place to be-
on the bridge- watch the sunrise.
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And you have this deep orange sun coming up.
And you see the light changing in the horizon
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just before it breaks.
Aboard the Maersk Mc-Kinney Moller, the crew
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on the giant ship settles into their daily
rhythm: Checking the bracing on the containers,
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keeping the ship clean and performing routine
maintenance.
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Maersk is a Danish company; the captain and
his senior officers are from Denmark. The
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rest of the crew is international.
In the past, everything had to be done manually.
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Nowadays, a lot of the functions that we control
are done automatically via computers and-
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and monitors and that, of course, requires
less manpower.
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An officer or a navigator nowadays is actually,
he's not steering the big wheel anymore; he's
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basically monitoring all the automated systems
on board.
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The 24 crew who run the ship are spread over
its quarter mile length. They seldom see one
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another. They come together at mealtime, three
times a day.
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Romey, the Phillipino cook and the oldest
member of the crew, prepares a diverse menu
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with dishes that make the men feel at home.
It's a time to relax, share information and
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plan for the work ahead.
This huge ship demonstrates the impact Adam
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Smith envisioned international trade would
have on prosperity. It's not what's in the
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containers, but what they represent that's
important.
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Smith believed that wealth is not just the
things you own- like gold in the bank- but
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also your labor, and the things you can get
in exchange. The more others create and the
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more you trade with them, the better off you
are.
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And with ships like this, world trade is much
more efficient and environmentally friendly.
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At the heart of the vessel is its unique state
of the art propulsion system.
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They are what they call super long stroke,
when you have super long stroke you have a
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slower speed.
Per Schilling Nielsen is chief engineer. He's
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been with Maersk for 25 years.
They're doing maximum 73 revolutions per minute.
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They're directly linked to the propeller;
that means the propeller is doing maximum
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73 RPM.
The long stroke engine is designed to squeeze
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the most miles possible out of every drop
of oil. It lowers fuel consumption by 37%
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and carbon dioxide emissions per container
by 50%.
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We spend a lot less fuel consumption moving
one box from one of the major ports in the
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Far East to one of the major ports in Europe.
In fact, per container, this ship emits less
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greenhouse gas than almost any other method
of transportation.
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It emits less CO2 per ton of goods moved;
fifteen times less than a truck and six times
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less than rail. Much of this efficiency is
due to the sheer number of containers secured
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on board.
We are carrying at least close to 60% of the
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cargo below the deck. So people have a tendency
to forget that because you don't see it; it's
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just hidden below the hatches of the ship.
Rene Hansen is the ship's chief officer and
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among other tasks, is in control of the cargo.
Looking at a stack like this we see we have:
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one, two, three, four, five, six, seven, eight,
nine ten, stacked on top of each other. This,
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combined with loading nine on deck, gives
a very good idea that the vast amount of cargo
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that is being carried, which you cannot see
when the ship just passes by on the open oceans.
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So, whatever you can imagine that can be put
inside this box we can more or less carry.
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And today more and more of what's carried
aboard ship are perishable goods, enabling
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growers to sell into markets thousands of
miles away, at a fraction of the cost of airfreight.
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Torben Andersen is the electrical engineer
aboard ship.
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Every morning I go around- look at every single
container; see if there's any malfunction,
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if the temperature is as it's supposed to
be.
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Everything that you put in your refrigerator
at home we put in the refrigerators on board
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the ship just in vast scales.
And if you look at our refrigerator containers
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we can carry flower bulbs from Netherland
for tulips. We can carry chocolate from Poland.
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We can carry wine, expensive French wine we
carry in refrigerated containers.
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Fruits and vegetables stay fresh for dramatically
longer periods of time...
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We can make an artificial atmosphere in our
containers.
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00:26:23,415 --> 00:26:26,919
...by controlling the levels of oxygen, carbon
dioxide and nitrogen .
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00:26:26,919 --> 00:26:33,091
And then, as we're getting closer to the port
of delivery, then we will start increasing
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the oxygen level in the container and then
the bananas are so to speak ready, when they
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hit the supermarket
The shelves of supermarkets throughout the
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world are stocked with goods transported aboard
cargo ships like the Maersk Mc-Kinney Moeller.
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00:26:51,343 --> 00:26:56,515
This is a Whole Foods Market in Austin, Texas.
There are over 400 Whole Foods Markets in
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the United States, Canada and the United Kingdom.
They sell products from around the world.
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Their "Whole Trade Guarantee" promises that
consumers can shop with a conscience.
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Most businesspeople are honest and ethical.
In fact, it turns out that the more ethical
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they are, the better the company performance.
In the cutthroat supermarket business it's
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important to stake out your own territory.
The company's motto is "Whole Foods, Whole
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People, Whole Planet."
At the center of this amazing story is Co-Founder
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John Mackey. To understand Whole Foods Market,
you have to understand him.
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The original vision for Whole Foods was- very
simply is: we wanted to sell healthy food
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to people, earn a living, and have fun.
The higher purpose of Whole Foods has become
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a lot deeper and more complex than it was
back 34 years ago.
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And that brings us to mission. Mission is
something Mackey takes seriously. It's not
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just platitudes for a wall plaque in a corporate
lobby. It's the statement that embodies his
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00:27:57,976 --> 00:28:02,447
ethical perspective.
We want to sell healthy food to people, help
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00:28:02,447 --> 00:28:07,619
people to reach their highest potential through
having good health. We also have a sense that
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the people that work for us should be flourishing
and should be happy in their work, and we
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00:28:13,058 --> 00:28:16,895
also feel a responsibility for the larger
communities that we're trading with.
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It's been on Fortune's 100 Best Companies
to Work For list for eighteen years in a row.
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00:28:22,001 --> 00:28:26,539
What seems to make Whole Foods so successful
is that the people who work here are strongly
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committed to all the stakeholders, to customers
and team members, to stockholders and suppliers,
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which has resulted in highly committed employees
and very faithful customers.
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00:28:40,218 --> 00:28:44,823
And a lot of John Mackey's philosophy is based
solidly on Adam Smith.
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I mean... Adam Smith was so far ahead of his
time.
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The totality of his ideas are still very,
very important and very relevant today.
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Smith gives us a way of thinking about markets
and morality together. For Smith, these are
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not two things that can easily be extricated
from each other, as if one can simply talk
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about rational, economic men on one hand and
then moral men in a different sphere on another.
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Smith understood that you're going to be better
at business if you can understand your customers
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and generally sympathize with them, as well
as understanding and sympathizing with your
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employees.
I think that most of our guests when they
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walk in the door know that there's something
different.
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For a lot of people it's the energy of the
team members, right? I think a lot of our
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team members feel empowered and feel fulfilled
and therefore feel happy and satisfied in
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their work.
Lindsay Mucha is store team leader of one
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of the Whole Foods Markets in Austin. She's
been with Whole Foods for over 10 years.
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My goal was to work here for six months, graduate
from college and then go off and find my career
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path, and I very quickly fell in love with
Whole Foods. I loved the values and the mission.
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00:30:05,003 --> 00:30:12,177
The greatest source of creativity and innovation
exists in our team member base. A big part
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00:30:12,177 --> 00:30:19,951
of what we're trying to do is allow them to-
to be themselves, to be authentic, to be spontaneous,
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allow them to- to experiment, to create new
things, to create the innovations.
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This helps to illustrate Adam Smith's principle
that top down command structures aren't always
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the best. Things organize themselves better
from the bottom up.
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"The natural effort of every individual to
better his own condition... is so powerful,
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00:30:41,606 --> 00:30:47,610
that it is, alone... capable of carrying on
the society to wealth and prosperity."
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00:30:47,646 --> 00:30:54,680
Many of the institutions that we have, language,
markets, you name it, these are indeed the
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00:30:54,986 --> 00:30:59,624
results of human action, but they're not the
results of human design. We never planned
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these things; they just evolve naturally.
So note that phrasing, "individual human action,
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but not individual human design."
You don't need a central planning authority
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to run your society well.
And that's a really cool thing about the Whole
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00:31:13,972 --> 00:31:18,510
Foods Market culture. You know it's not top
down. It's not a mandate on everything. If
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00:31:18,051 --> 00:31:22,756
someone has a good idea that someone else
likes, there's a good chance it's going to
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00:31:23,215 --> 00:31:28,153
spread and- and work for a lot of people.
Carol Medeiros is produce coordinator at Whole
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Foods Markets in Austin, Texas.
I would say that you know we're always trying
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to find what's new and what's next, and a
lot of the times- most of the time- our best
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00:31:35,056 --> 00:31:37,892
ideas come from the team members that work
in the stores every day.
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Because the team members genuinely care...
because it's theirs, right?
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Whole Foods Market's success in promoting
healthy foods has spawned increased competition
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in the marketplace. In response, the company
is opening a new line of stores called "365
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by Whole Foods Market," which they hope will
make their products more accessible to more
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00:32:00,118 --> 00:32:04,389
consumers.
When stakeholder philosophy is adopted in
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a more conscious way and businesses begin
to act in more conscious way for higher purpose,
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I think most of the hostility towards business
and capitalism will disappear.
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And I think what's really nice about this,
and companies that are able to be mission
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driven and purpose driven, and still be profitable,
is that when you put that out there for people
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to choose there are people who choose it and
there are people who will vote with their
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dollars, right? And do it because that's what's
valuable to them. So I think that's nice,
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it's about choice.
For markets to make good on the hope that
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they would bring, what Smith called, universal
opulence to all ranks of people, Smith thought
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that it was necessary for them to be supplemented
by a certain conception of morality.
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By "morality" Smith meant fairness and a level
playing field for all. But what happens when
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00:32:53,572 --> 00:32:58,109
some are able to tilt the market to their
advantage?
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Adam Smith asked the very same question 250
years ago. And the problem can be easily illustrated
363
00:33:03,448 --> 00:33:07,485
by taking a walk in the woods.
In state and national parks all across the
364
00:33:07,485 --> 00:33:12,579
United States you'll often find signs like
this that say, "Please do not feed the animals."
365
00:33:13,425 --> 00:33:21,533
Because if you feed the wild animals they
lose their ability to gather food in the wilderness
366
00:33:21,533 --> 00:33:28,707
and as a result, they tend to be less resilient
and their survival is at risk.
367
00:33:28,707 --> 00:33:34,012
Luigi Zingales is professor of entrepreneurship
and finance at the Booth School of Business
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00:33:34,012 --> 00:33:39,451
at the University of Chicago.
I think that a similar sign should be put
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in Washington to say, "Please don't feed business,"
precisely because I love business I don't
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want business to become fat and unable to
compete in the global marketplace.
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Smith was very suspicious of partnerships
between government and business. That's effectively
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what we call cronyism today.
This is the result of feeding the animals,
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Washington style. In recent years housing
values around the U.S. capital have skyrocketed.
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There is no real industry, there is no real
commerce and it's pretty scary that the wealthiest
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00:34:14,619 --> 00:34:19,758
counties in the United States are in the suburbs
of Washington, D.C.
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The top two richest counties in the United
States, and 6 of the top ten, are suburbs
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of Washington, D.C.
All that money is basically money that is
378
00:34:29,434 --> 00:34:36,875
sucked from the system and wasted in lobbying.
Lobbying pays very well. And not just for
379
00:34:36,875 --> 00:34:41,246
the lobbyists. The real payoffs go to the
corporations they represent.
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00:34:41,246 --> 00:34:45,984
Smith thought that any institution- government
included- could become corrupted if it was
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00:34:45,984 --> 00:34:53,325
too big and made too many decisions centrally.
"To widen the market and to narrow the competition
382
00:34:53,325 --> 00:34:59,497
is always the interest of the dealers... Any
new law or regulation of commerce... ought
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00:34:59,497 --> 00:35:06,371
always to be listened to with great precaution."
A series of recent governmental regulations
384
00:35:06,371 --> 00:35:12,110
illustrates Adam Smith's fear.
Corn ethanol is a bio-fuel. It's basically
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fuel that comes from corn. It's more costly
and far more inefficient to make than ethanol
386
00:35:17,148 --> 00:35:21,186
from sugar.
But now almost 40% of the nation's corn crop
387
00:35:21,186 --> 00:35:27,058
goes into making ethanol, which has driven
the price of corn way up. It makes corn farmers
388
00:35:27,058 --> 00:35:31,396
and processors happy because it gives them
a guaranteed profit. But all of us have to
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00:35:31,396 --> 00:35:36,935
pay more for foods that use corn, especially
meat and poultry.
390
00:35:36,935 --> 00:35:41,973
The fuel companies are required by federal
law to buy ethanol whether they want it or
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00:35:41,973 --> 00:35:49,014
not, or whether motorists want it or not.
Between 2007 and 2012, the corn ethanol lobby
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00:35:49,014 --> 00:35:55,088
spent 139 million dollars, and in return,
gained over 28 billion dollars in corn ethanol
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00:35:55,754 --> 00:36:00,458
tax credits.
So once you have this kind of returns then
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00:36:00,458 --> 00:36:06,502
people will not invest in R&D. They will not
invest in new sort of organizational form.
395
00:36:06,898 --> 00:36:11,169
They will not invest in new technology. They
will not invest in new property plant and
396
00:36:11,169 --> 00:36:15,473
equipment. They will invest in lobbying.
Many corporations prefer to get their profits
397
00:36:15,473 --> 00:36:19,911
by legislating them rather than by selling
goods and services that people want in an
398
00:36:19,911 --> 00:36:25,150
open market. Adam Smith saw exactly the same
forces at work in his day.
399
00:36:25,015 --> 00:36:28,552
What Smith saw was that when business people
go to the government and they say we want
400
00:36:28,687 --> 00:36:34,292
a special royal charter, we want special protections
from competition, we are a vital national
401
00:36:34,292 --> 00:36:39,364
industry and we need special privileges, you've
got to be careful, because when this happens,
402
00:36:39,364 --> 00:36:44,436
this is really people conspiring to protect
their own interests at the expense of others.
403
00:36:44,436 --> 00:36:51,450
Adam Smith understands that in order for competition
to work its magic you need to have rules in
404
00:36:51,576 --> 00:36:56,781
place because otherwise rather than competition,
you have the law of the jungle.
405
00:36:56,781 --> 00:37:02,087
This is Adam Smith's key insight; competition
is not a way of giving power to companies.
406
00:37:02,087 --> 00:37:07,525
It's a way of giving us power over them.
The Founding Fathers not only established
407
00:37:07,525 --> 00:37:13,331
a government of the people, by the people,
for the people. They also established a economic
408
00:37:13,331 --> 00:37:19,204
system of the people, by the people, for the
people. This is what distinguishes the United
409
00:37:19,204 --> 00:37:25,276
States from the rest of the world, and this
is what gives us hope.
410
00:37:25,276 --> 00:37:30,849
But is it possible to have markets that operate
in the interests of sellers and buyers, without
411
00:37:30,849 --> 00:37:36,754
a lot of government regulation? The answer
might be yes, if they embody Adam Smith's
412
00:37:36,754 --> 00:37:40,959
ideas.
It used to be that when you wanted to go someplace
413
00:37:40,959 --> 00:37:47,165
in a city you had to wait for a taxi or rent
a car. But now, with apps like Uber and Lyft,
414
00:37:47,165 --> 00:37:50,242
that's all changed. Lyft?
Yes.
415
00:37:50,935 --> 00:37:56,307
Hi are you David?
Yes.
416
00:37:56,307 --> 00:38:00,512
People today ride with strangers in their
cars and with sites like Airbnb they sleep
417
00:38:00,512 --> 00:38:05,016
in strangers' homes. It's just a tiny part
of a much larger, and much more important,
418
00:38:05,016 --> 00:38:08,319
social trend: an explosion of trust, enabled
by the internet.
419
00:38:08,319 --> 00:38:15,360
And the granddaddy of them all is eBay.
Almost every country in the world has buyers
420
00:38:15,036 --> 00:38:23,244
and sellers who work inside the eBay marketplace.
Devin Wenig is CEO of eBay Marketplaces.
421
00:38:23,568 --> 00:38:29,307
eBay is founded on this principle of economic
democracy; that individuals around the world
422
00:38:29,307 --> 00:38:35,113
who don't know each other and have never met
can work in a system to be able to conduct
423
00:38:35,113 --> 00:38:39,784
economic transactions fairly and securely
and have confidence in that.
424
00:38:39,784 --> 00:38:47,759
eBay was founded in 1995 by Pierre Omidyar.
Pierre thought very strongly about the notion
425
00:38:47,759 --> 00:38:53,665
of the free market. He believed in Adam Smith's
principles. He believed that an economic democracy
426
00:38:53,665 --> 00:38:58,469
would not only be a great business, but it
had the potential to do immense amounts of
427
00:38:58,469 --> 00:39:02,106
good around the world.
eBay has hundreds of thousands of small sellers
428
00:39:02,106 --> 00:39:06,044
around the world that are now doing more than
half their business outside of their national
429
00:39:06,044 --> 00:39:11,950
borders. One retailer that is profiting in
this new era is Gelb Music.
430
00:39:11,095 --> 00:39:16,166
Gelb was started in 1939... about 75 years
ago. Located right here in Redwood City, California,
431
00:39:17,021 --> 00:39:22,260
it's been here ever since. And about- carry
about a little over 50,000 products here.
432
00:39:22,026 --> 00:39:30,501
Mike Craig is Gelb's ecommerce/marketing manager.
We have a complete line of drums, bass guitars,
433
00:39:30,735 --> 00:39:34,038
recording equipment.
We were waiting for our-our own website to
434
00:39:34,038 --> 00:39:39,911
be built, we took about 200 products, mostly
snare drums, did about $200,000. The test
435
00:39:39,911 --> 00:39:42,747
definitely worked.
The following year we put up about a thousand
436
00:39:42,747 --> 00:39:46,050
products, maybe a little bit over and we did
about $750,000 in sales.
437
00:39:46,005 --> 00:39:52,111
We now have about 160 million active consumers
who buy and sell in our marketplace every
438
00:39:52,156 --> 00:39:59,664
day. We now sell a little less than $90 billion
of goods every year. And consumers access
439
00:39:59,664 --> 00:40:05,937
us from over 190 countries.
Well, eBay has saved the store number one.
440
00:40:05,937 --> 00:40:11,075
But has also opened our eyes to markets that
we didn't think were obtainable.
441
00:40:11,075 --> 00:40:15,480
One of the great things about marketplaces
is that they act as an incredible price discovery
442
00:40:15,048 --> 00:40:18,451
mechanism.
Because if you're looking at a collectable
443
00:40:18,883 --> 00:40:27,058
or a coin or a comic book or a rare automobile,
the likelihood is that there were more sales
444
00:40:27,058 --> 00:40:32,463
in eBay for that particular item than in any
other marketplace in the world.
445
00:40:32,463 --> 00:40:37,702
Adam Smith would have said that an "invisible
hand" guides eBay sellers around the world.
446
00:40:37,702 --> 00:40:42,607
As prices are on the rise, because buyers
want a particular item, sellers stream into
447
00:40:42,607 --> 00:40:49,514
the market to satisfy that demand. And when
demand drops... prices go down.
448
00:40:49,514 --> 00:40:57,021
Imagine a world where there're screens everywhere.
Those screens are connected to a global marketplace.
449
00:40:57,021 --> 00:41:01,826
That global marketplace has all the worlds'
inventory- priced fairly- because it's an
450
00:41:01,826 --> 00:41:06,764
open marketplace. And you're one click away
from buying anything you want at any time
451
00:41:06,764 --> 00:41:12,403
for a fair price.
There are millions of exchanges, each minute,
452
00:41:12,403 --> 00:41:18,176
all of them without regulation, among strangers,
across borders and oceans. It's an enormous
453
00:41:18,176 --> 00:41:25,083
amount of business... based solely on trust.
Pierre's notion was, let the buyers and sellers
454
00:41:25,083 --> 00:41:30,655
in the marketplace determine who the best
buyers and sellers are. So the eBay feedback
455
00:41:30,655 --> 00:41:33,662
system was born.
The way ratings work is that when you sell
456
00:41:33,725 --> 00:41:38,629
a product, the customer can go back and rate
you: Was it a good experience? Was it a bad
457
00:41:38,629 --> 00:41:41,532
experience? And that goes onto your record
where everyone sees it.
458
00:41:41,532 --> 00:41:47,905
"Public services are never better performed
than when their reward comes in consequence
459
00:41:47,905 --> 00:41:54,379
of their being performed, and is proportioned
to the diligence employed in performing them."
460
00:41:54,379 --> 00:41:59,384
I think being judged by your customers is
a wonderful idea. I think that keeps us as-as
461
00:41:59,384 --> 00:42:03,855
sellers on our toes. You have to deliver on
what you promise, and if you do, that you're
462
00:42:03,855 --> 00:42:09,727
rewarded by more customers and you'll grow.
The free market isn't about robbing people
463
00:42:09,727 --> 00:42:16,501
or cheating them, stealing from them; it is
about cooperating with them. If people trust
464
00:42:16,501 --> 00:42:20,508
you, if you're giving them a good service,
they will do business with you. If you're
465
00:42:20,571 --> 00:42:25,243
trying to cheat them, they might deal with
you once, but once they've been cheated, you'll
466
00:42:25,243 --> 00:42:31,582
never see them again.
Part one of the promise is a fair, open, fast,
467
00:42:31,582 --> 00:42:37,155
trusted marketplace that's enabled by technology.
Coordinating a global marketplace like this
468
00:42:37,155 --> 00:42:40,992
takes one of the largest site operation centers
in the world.
469
00:42:40,992 --> 00:42:47,999
We do about 300 million searches a day on
the eBay marketplace. There are computers
470
00:42:47,999 --> 00:42:54,772
and people, and systems and processes that
all have to work in sync to make sure that
471
00:42:54,772 --> 00:42:59,577
that's working 24/7.
When we look at forecasting and eBay's going
472
00:42:59,577 --> 00:43:04,782
to make up anywhere from 50 to 80% of our-our
sales, that's- that's a huge number.
473
00:43:04,782 --> 00:43:11,255
There is a concept of a micro-multinational,
which I think is fascinating. And there are
474
00:43:11,255 --> 00:43:15,059
hundreds of thousands of them alive inside
the eBay marketplace.
475
00:43:15,059 --> 00:43:21,365
It's that family owned independent, just homegrown
kind of store. We're just being able to sell
476
00:43:21,365 --> 00:43:27,638
around the world now.
So, without either a strong corporate intervention
477
00:43:27,638 --> 00:43:34,579
in the sense of eBay, or a strong government
or regulatory intervention, this is a community
478
00:43:34,579 --> 00:43:38,950
that has grown enormously because in essence
it's self-regulated.
479
00:43:38,095 --> 00:43:43,834
A free market is one of the most powerful
forces on earth. And we've seen that with
480
00:43:44,689 --> 00:43:49,227
our business.
Adam Smith presented his ideas on the free
481
00:43:49,227 --> 00:43:55,333
market in his second great book, The Wealth
of Nations which was published in 1776, just
482
00:43:55,333 --> 00:44:01,272
months before the American colonies exploded
in revolution. Copies made their way across
483
00:44:01,272 --> 00:44:06,677
the Atlantic and into the hands of those shaping
the structure of the new republic.
484
00:44:06,677 --> 00:44:11,315
The Founders were dealing with things like
how to structure a government, an economy,
485
00:44:11,315 --> 00:44:15,419
the banking system, the church... the military.
And Smith had a lot of things to say on all
486
00:44:15,419 --> 00:44:21,492
these points. So does the United States follow
Smith's principles? The answer can be found
487
00:44:21,492 --> 00:44:28,599
here, at the Library of Congress, in Washington,
D.C.
488
00:44:28,599 --> 00:44:31,626
The Library of Congress is the largest library
in the world.
489
00:44:31,869 --> 00:44:36,274
Its holdings include more than 32 million
cataloged books and other print materials,
490
00:44:36,274 --> 00:44:40,545
and the largest rare book collection in North
America.
491
00:44:40,545 --> 00:44:44,282
Included in the collections is the personal
library of Founder, Thomas Jefferson, author
492
00:44:44,282 --> 00:44:48,586
of the Declaration of Independence, and a
lifelong admirer of Adam Smith.
493
00:44:48,586 --> 00:44:56,494
His library at the time numbered 6,487 volumes.
Mark Dimunation is chief of the Rare Book
494
00:44:56,494 --> 00:45:00,565
and Special Collections Division at the Library
of Congress.
495
00:45:00,565 --> 00:45:05,036
Certainly one thing you can learn by looking
at Jefferson's library is the pervasiveness
496
00:45:05,036 --> 00:45:12,070
of Enlightenment Philosophy, and intellectual
conversation that plays throughout the creation
497
00:45:12,376 --> 00:45:16,047
of the American government.
In fact, you could claim that Jefferson's
498
00:45:16,047 --> 00:45:19,083
book collection brings the enlightenment to
America.
499
00:45:19,083 --> 00:45:26,524
In 1814, the British attacked and burned Washington.
On learning of the burning of the Capitol
500
00:45:26,524 --> 00:45:32,196
and the loss of the 3,000-volume Library of
Congress, Jefferson offers Congress his personal
501
00:45:32,196 --> 00:45:39,203
library as a replacement.
And in 1815, gentlemen arrived with horse
502
00:45:39,203 --> 00:45:45,509
drawn wagons, took a collection that took
Jefferson 50 years to build, left him in Monticello,
503
00:45:45,509 --> 00:45:50,147
he never saw his books again, never went to
Washington again.
504
00:45:50,147 --> 00:45:55,386
But a second fire on Christmas Eve in 1851,
destroyed two-thirds of those volumes.
505
00:45:55,386 --> 00:46:00,891
Through a private grant, the Library of Congress
is now reassembling Jefferson's Library, as
506
00:46:00,891 --> 00:46:04,996
it was when he sold it to Congress 200 years
ago.
507
00:46:04,996 --> 00:46:09,433
It was the entire world of Thomas Jefferson's
mind... the understanding of the roots of
508
00:46:09,433 --> 00:46:14,071
so much of what influences American culture,
the nature of the Constitution, the nature
509
00:46:14,071 --> 00:46:19,410
of the revolution, the foundation of separation
of church and state, the whole philosophy
510
00:46:19,041 --> 00:46:27,416
of politics as it is in the United States
is embedded in that collection.
511
00:46:27,785 --> 00:46:33,324
One book that has survived is Thomas Jefferson's
original copy of The Wealth of Nations.
512
00:46:33,324 --> 00:46:39,730
This is the three-volume set of Inquiry into
the Nature and Causes of the Wealth of Nations
513
00:46:39,073 --> 00:46:42,910
by Adam Smith. These are books that belonged
to Thomas Jefferson.
514
00:46:43,567 --> 00:46:49,240
He writes a lot about his reading but he very
rarely marks his books. There's no underlining
515
00:46:49,024 --> 00:46:54,930
here, there's no, "Good idea use in the Declaration
of Independence," there's nothing like that,
516
00:46:55,146 --> 00:47:00,317
so you really have to read what Jefferson
says about books in order to understand what
517
00:47:00,317 --> 00:47:04,388
he gains from them.
Jefferson didn't just read Smith's book; he
518
00:47:04,388 --> 00:47:09,393
frequently studied it, referenced it, and
recommended it to others.
519
00:47:09,393 --> 00:47:15,132
In a letter to John Norvell, Jefferson writes:
"If your views of political enquiry go further
520
00:47:15,132 --> 00:47:20,705
to the subjects of money and commerce, Smith's
Wealth of Nations is the best book to be read..."
521
00:47:20,705 --> 00:47:25,509
There has to have been a moment in which Jefferson
and Hamilton had a conversation that was at
522
00:47:25,509 --> 00:47:30,981
least laced with Smithian philosophy if nothing
else- whether they identified him or not.
523
00:47:30,981 --> 00:47:34,919
This is a book however that- that Jefferson
would take seriously.
524
00:47:34,919 --> 00:47:41,258
But Jefferson wasn't the only Smith devotee
among the Founders. James Madison, considered
525
00:47:41,258 --> 00:47:44,495
the principal author of the Constitution,
was also an admirer.
526
00:47:44,495 --> 00:47:50,534
I think of Madison as having a view of government
very similar to Smith's in a very, very deep
527
00:47:50,534 --> 00:47:53,471
way.
Sam Fleischhacker has written extensively
528
00:47:53,471 --> 00:47:56,518
about Adam Smith's influences in Colonial
America.
529
00:47:56,941 --> 00:48:02,379
Both Madison and Smith believed that human
beings are strongly motivated by self-interests,
530
00:48:02,379 --> 00:48:07,885
but also capable of virtue, and that what
you want to do is design institutions such
531
00:48:07,885 --> 00:48:12,656
that first of all, freedom is protected, whether
people are acting in a self-interested fashion
532
00:48:12,656 --> 00:48:17,762
or not. And secondly, they have
the opportunity to develop their virtues.
533
00:48:17,762 --> 00:48:23,534
So the Founders certainly knew of Smith and
his works. But to what extent did Smith influence
534
00:48:23,534 --> 00:48:28,072
the American character? Is the United States
"Smithian"?
535
00:48:28,072 --> 00:48:31,175
I think the United States is Smithian in its
bones.
536
00:48:31,175 --> 00:48:37,199
Smith fits extremely well with the vision
of the Founders, and indeed, of the vision
537
00:48:37,415 --> 00:48:40,518
of most Americans from that time until our
own.
538
00:48:40,518 --> 00:48:43,605
And what you see in the Constitution is an
attempt to implement and integrate into a
539
00:48:44,388 --> 00:48:49,059
governmental plan some of the ideas Smith
had about what could allow for a prosperous
540
00:48:49,059 --> 00:48:53,497
society.
"Every man is left perfectly free to pursue
541
00:48:53,497 --> 00:49:00,571
his own interest in his own way... The sovereign
is completely discharged from a duty [for
542
00:49:00,571 --> 00:49:06,177
which] no human wisdom or knowledge could
ever be sufficient; the duty of superintending
543
00:49:06,177 --> 00:49:11,415
the industry of private people."
The United States sees itself and talks about
544
00:49:11,415 --> 00:49:15,753
itself as a land of opportunity. That's really
the Smithian vision in a nutshell.
545
00:49:15,753 --> 00:49:22,426
You have a limited government with a few but
specific and robust protections. Much of the
546
00:49:22,426 --> 00:49:26,130
actual work of making your life better was
left to the individuals.
547
00:49:26,013 --> 00:49:31,452
But to do that in a way that was stable, to
do it in a way that had long term benefits,
548
00:49:31,569 --> 00:49:38,108
to do it in a way in which there weren't simply
the concerns of the moment but to have a lasting
549
00:49:38,108 --> 00:49:43,480
constitutional order. This, I think, binds
the American Founders to the Scots and especially
550
00:49:43,048 --> 00:49:47,420
to Smith in a deep way.
Well, here you have a groundbreaking book
551
00:49:47,852 --> 00:49:53,791
in how to run an economy and more than that,
it's really a general book on politics. So,
552
00:49:53,791 --> 00:49:57,928
it makes a good deal of sense that these people
who were founding a new country would look
553
00:49:57,928 --> 00:50:02,233
over to the best work in the Enlightenment,
not just to Smith, but to the other great
554
00:50:02,233 --> 00:50:08,772
social scientists of the day, as it were,
and be particularly interested in them.
555
00:50:08,772 --> 00:50:13,644
Ideas matter. When faced with the challenge
of how to create and structure a new nation,
556
00:50:13,644 --> 00:50:16,647
the Founders turned to the Enlightenment-
and to Adam Smith- for guidance.
557
00:50:16,647 --> 00:50:29,293
As the Maersk Mc-Kinney Moller steams across
the English Channel, she is just a day from
558
00:50:29,293 --> 00:50:37,868
her next port of call. Now the pace aboard
ship quickens.
559
00:50:37,868 --> 00:50:45,142
Lines are prepared for tomorrow's docking.
Unloading and loading schedules are reviewed.
560
00:50:45,142 --> 00:50:48,979
And charts for the approach to the next harbor
are studied.
561
00:50:48,979 --> 00:50:57,488
Their destination is the largest port in Europe.
Here, where the Rhine meets the North Sea,
562
00:50:57,488 --> 00:51:03,694
is the Port of Rotterdam, in the Netherlands.
It is the gateway to the markets of Western
563
00:51:03,694 --> 00:51:09,600
Europe. It is the point of entry to a vast
network of rail, highways, and inland waterways
564
00:51:09,006 --> 00:51:16,030
that serves 350 million people.
It's pitch dark and hours from dawn when the
565
00:51:16,084 --> 00:51:21,723
Maersk Mc-Kinney Moller finally nears the
entrance channel to the Port of Rotterdam.
566
00:51:22,479 --> 00:51:27,651
Bringing a ship this size to a safe berth
in such crowded sea-lanes will require keen
567
00:51:27,651 --> 00:51:32,790
judgment and expert skills.
Maas Approach, Maas Approach this is Maersk
568
00:51:32,079 --> 00:51:36,783
Mc-Kinney Moller, Maersk Mc-Kinney Moller.
Maersk Mc-Kinney Moller, Maas Approach, go
569
00:51:37,494 --> 00:51:40,965
ahead...
When, when the vessel approaches the- the
570
00:51:40,965 --> 00:51:46,036
port you have this interaction, informing
you about the in and out bound traffic, the
571
00:51:46,036 --> 00:51:50,307
weather conditions... if there's any change
to the pilot time.
572
00:51:50,307 --> 00:51:56,680
Maersk Mc-Kinney Moller, ETA 06:45, your draft
1-4, decimal 9, is that correct, over?
573
00:51:56,068 --> 00:52:00,873
Maas Approach, Maersk Mc-Kinney Moller, that's
correct, over.
574
00:52:01,485 --> 00:52:06,690
Still hours before dawn and 14 miles off the
Dutch coast, the boat carrying the pilot pulls
575
00:52:06,069 --> 00:52:13,710
alongside. To guide the vessel into the crowded
port, the local pilot will rely on his unique
576
00:52:14,331 --> 00:52:20,204
knowledge and experience.
From now until they dock, the pilot and the
577
00:52:20,204 --> 00:52:26,477
captain are a team.
We slowly maneuver the vessel into the port...
578
00:52:26,477 --> 00:52:32,783
and it's a quite kind of slow process but
Rotterdam Port, it's one of the biggest ports
579
00:52:32,783 --> 00:52:34,880
in the world.
A vessel like this you can't turn like a car
580
00:52:35,753 --> 00:52:44,695
so every maneuver, and every turn, and every
swing takes time. A vessel this size you cannot
581
00:52:44,695 --> 00:52:52,836
stop like this. You've got to plan your maneuver
and you always need to have a plan B if plan
582
00:52:52,836 --> 00:53:07,084
A is not working.
Joining the Maersk Mc-Kinney Moller are almost
583
00:53:07,084 --> 00:53:15,259
one hundred other cargo ships; a third of
them from Asia.
584
00:53:15,259 --> 00:53:21,031
In the last forty years, global trade increased
from less than two trillion dollars to almost
585
00:53:21,031 --> 00:53:26,603
nineteen trillion dollars. And Adam Smith
predicted that that kind of development would
586
00:53:26,603 --> 00:53:33,077
also result in a reduction in global poverty.
In fact, 750 million people were lifted out
587
00:53:33,077 --> 00:53:39,016
of poverty over those forty years.
As the last containers are unloaded from the
588
00:53:39,016 --> 00:53:43,454
Maersk Mc-Kinney Moller... those offloaded
first are making their way to waiting trucks,
589
00:53:43,454 --> 00:53:49,326
where they will be delivered throughout Europe.
And Adam Smith would argue that those containers
590
00:53:49,326 --> 00:53:56,100
don't just carry products, they carry prosperity
and a better quality of life.
591
00:53:56,001 --> 00:54:01,506
Two hundred years ago, a man who lived in
a world of sailing ships and horse drawn carriages,
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imagined how much better the world could be.
He wrote two masterpieces providing an astonishing
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road map.
He wanted to create the conditions by which
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ordinary people could go about their own business
and to work, and save, and prosper, and help
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themselves and their families.
He wasn't interested in protecting the wealth
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of the already privileged, the monied, the
aristocrats, what he was interested in is:
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How can we raise the estates of the least
among us?
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And I think that the two books together form
a coherent project in trying to give a vision
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of a commercial society that was not just
a market society but also a market society
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built on a very particular conception of morality.
Every generation has to cope with the problem
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of how far should governments intervene in
the business of trying to maximize the wealth
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of their own country.
Perhaps more than any other person, Adam Smith's
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ideas have led directly to the first real,
broad-based advancements in mankind's quality
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of life in thousands of years.
He was a proponent of free markets and morality.
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His writings and ideas have spread around
the globe. And in spite of the progress we
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have yet to make, his ideas truly changed
our world.
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Funding for this program has been provided
by: John Templeton Foundation and Templeton
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Religion Trust.
https://www.youtube.com/watch?v=8ruiUOQERnw
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