In conjunction with the COP26 UN Conference on Climate Change in Glasgow, Scotland, the Edinburgh-based Global Ethical Finance Initiative (GEFI), together with the University of Glasgow and Royal London, is honouring the monumental contributions of Glasgow’s most famous economist, Adam Smith, with the publication of five essays on interpreting his treatise on The Wealth of Nations for the contemporary challenges the world faces with climate change.
Tan Sri Dr Zeti Aziz, former Governor of the Central Bank of Malaysia and visionary and Co-Chair of the Board of Governors for Asia School of Business (a collaboration with MIT Sloan) was invited to contribute to this discourse with an essay interpreting for modern times Book V of Adam Smith’s Wealth of Nations.
Zeti observes that Smith’s Book V addresses the appropriate role of government in influencing the populace’s wellbeing, which complements his famous observation that an “invisible hand” will typically guide economic transactions and outcomes. In fact, Smith advocates that government provides what Zeti refers to as a “helping hand” concerning the provision of public goods and regulations where pure market outcomes require guidance.
“Until now, the planet has contributed towards sustaining human life. For those of Smith’s era, the idea that human activity could permanently damage the capacity of the planet to sustain humanity would have seemed unthinkable. However, as we well know, it is now at risk of being destroyed and depriving our future generations of the means to provide for themselves.
“The protection of the environment would certainly fit with Adam Smith’s overall framework described in Book V. It would not be inconsistent with his premise that state interventions are necessary in the areas in which the agenda to protect the well-being and, indeed, the very security and existence of humanity. In this particular instance, the need to avert a climate catastrophe provides not just clear grounds for state intervention, but that this is in fact one of the most important responsibilities of the state,” says Zeti.
Her view is that Adam Smith would have advocated for government action toward environmental sustainability by providing regulations and incentives for private industry and providing appropriate investments to address the climate change agenda.
Immediately following the conclusion of the COP26 Conference in Glasgow, Asia School of Business’ annual conference, Leadership for Enterprise Sustainability Asia (LESA), will run from 15-18 November, amplifying many of the COP26 messages but interpreting them for Malaysia and the ASEAN and emerging Asian nations.
