Speaker
Description
I discuss how Adam Smith’s moral theory explains the rise and fall of environmental sustainability, social responsibility, and corporate governance (ESG) as the gold standard for sustainable and responsible business practices. First, I explain how the rising popularity of ESG challenged the economic theory of the firm based on narrow self-interest and shareholder primacy. Second, I present Adam Smith’s moral theory based on shared values and social norms and argue that it formed the moral foundation for his political economy. Third, I explain how his moral theory explains both the rising popularity of ESG in the modern economy and its eventual backlash and fall. Absent Smith’s moral foundation and economic sensibility, ESG has gone from a set of ethical guidelines promoted by the United Nations to an iron fist of excessive regulations that threatens free-market economies and individual flourishing. I conclude by discussing how Adam Smith’s moral theory provides a responsible path forward based on a renewed emphasis on shared values, innovation, and long-term value creation.
| Organization | Georgia State University |
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