Personal leadership – adding happiness to the sustainability dialogue by tracing the legacy of Adam Smith

My personal leadership opportunity is reframing everyday work and non-work conversations to promote personal happiness as an aspiration on top of general discourse of sustainability in the global growth-oriented economy. In this way I want to contribute to a paradigm shift towards living using less resources yet yield more satisfaction for each individual and society.

This opportunity and challenge is about communication – and my role of a project manager in a strategy and policy-setting government organization is to communicate, communicate, communicate. Communication aligns people, and people aligned together do extraordinary things such as build airplanes and tall towers, invent computers and travel into space. Communicating right distinguishes development of nations, today separating likes of growing China, prosperous Scandinavian Countries and excellence-oriented United Arab Emirates from countries decidedly far less-blessed – it’s not hard to argue communication, developed and transmitted in the right way, can change everything.

Following lessons from Workshop 1, I looked into some personal much discussed in that week – stopping eating beef, ending use of bottled water and considering for example where my clothes were sourced from. Results of actions such as these are long term and will be positive if collective action is taken – so in essence all of us aware of the issues behind these initiatives are already, or can be, leaders of change. In seeking my own leadership opportunity I wanted to look at the bigger picture and into the human element of sustainability, moving away from the omnipresent “world is headed to a catastrophe”, “sustainability is complex” and “reduce your carbon footprint”-like discussions, as in my opinion they tend to reduce the focus on solutions and the way forward.

Anybody remember this illustration from Workshop 1 lecture by William Day? Narrative was about us humans collecting more and more stuff, not realizing that eventually that same stuff will cut off our the branch holding our nest. And this is where economy and economics come into the picture.

Capture

Adam Smith published his magnum opus “An Inquiry into the Nature and Causes of the Wealth of Nations”, generally referred to by its shortened title “The Wealth of Nations” in 1776, providing the foundation for new economists, politicians, mathematicians, biologists, and thinkers of all fields to build upon. The core of Smith’s thesis was that people have a natural tendency toward self-interest (in modern terms, looking out for yourself) and the result is prosperity.

By giving everyone freedom to produce and exchange goods as they pleased (free trade), people’s self-interest would promote greater prosperity than with stringent government regulations. Smith believed humans ultimately promote public interest through their everyday economic choices. In his famous example, a butcher does not supply meat based on good-hearted intentions, but because he profits by selling meat. The point made by the example is one of self-regulation, which in theory ensures maximum efficiency.

Almost 250 years later we may be seeing some downsides and imperfections either in the thinking or the way it was interpreted and grew up to the present moment, but many ideas are very much valid and alive.

Smith also explained the counter-forces of monopolies, tax preferences, lobbying groups, and other “privileges” extended to certain members of the economy at the expense of others, resulting in imbalances. These imbalances or rather inequalities have other consequences as noted in for example Rasmussen’s paper. Economic inequality leads people to sympathize more fully and readily with the rich than the poor, and this distortion in our sympathies in turn undermines both morality and happiness. The poor strive to imitate the wealthy and the wealthy imitate celebrities and other icons. The focus on the rich leads the less rich to want more, bringing us to a consumerist society and the illustration above – reflecting utter unsustainability of this way of thinking and living.

Even before studying Smith I had a feeling that there was a lot of merit in following some core philosophies on Buddhism – that the way to bliss is removing wanting (desire/cravings)… but that may be another blogpost.

Capitalism may not be the greatest system ever designed… but so far nobody has established a better one. For Smith, the reality was shades of grey. He believed corporations don’t corrupt our world – they simply serve our appetites and supply whatever it is we demand. The answer to society’s problems does not lie in getting rid of capitalism, but instead in learning how to make better use of it.

The father of modern Capitalism wrote another great work which is seldom discussed – Theory of Moral Sentiments (link to full book). It provided the ethical, philosophical, psychological, and methodological underpinnings to Smith’s later works, including the Wealth of Nations.  Since the original work is written in 18th century style of English, to facilitate better understanding I took an indirect approach to reading it through the excellent work of Russ Roberts in “How Adam Smith Can Change Your Life”.

At the core of his work, Smith was driven by a desire to discover the best ways to make individuals and nations happier.

His Wealth of Nations was really an extension of The Theory of Moral Sentiments. As analysed here, the self-interest of the market players (buy and sell side) needs to be pursued by people of conscience and with a clear moral capacity; he argues that sympathy is required to achieve socially beneficial results. The self-interest Smith speaks of is not a narrow selfishness that allows whatever market transaction, but involves sympathy. Pure selfishness he declared inappropriate, if not immoral. Therefore, self-interest of any actor includes the interest of the rest of society, since the socially-defined notions of appropriate and inappropriate actions necessarily affect the interests of the individual as a member of society. If this sounds philosophical and convoluted, grab a copy of Roberts’s book, it’s an easy and inspiring read.

A blogger noted that Smith’s famous metaphor of the invisible hand is only mentioned once in The Wealth of Nations, and presented as the same idea in The Theory of Moral Sentiments – so we cannot really have any misunderstanding about that. The Sentiments presents the psychological mechanisms behind the workings of the invisible hand. And it places economics in the broader context of life as a whole, a society in which morality and a wide range of virtues matter. The difference is that in the economic domain we place a little more emphasis on certain virtues, in particular ‘prudence’ – acting wisely with a view to your own interests.

Smith argues that morality promotes our own happiness. He gives two descriptions of why people are happy, one circumstantial and the other internal. As far as a person’s circumstances contribute to their happiness:

“What can be added to the happiness of the man who is in health, who is out of debt, and has a clear conscience?”

Smith makes this observation, not to suggest that someone could not be made happier once he met those three conditions, but that any addition would be relatively small in comparison to what he already had. This paradigm easily reminds us of various independently developed theories such as the Maslow’s hierarchy of needs (which was published about two centuries later).

How does one tie these thoughts on global economy with sustainability and make it a personal challenge? The first part has many examples, such as commoditizing greenhouse gas emissions as one of the large consequences of current unsustainable economy, as established by the Kyoto protocol. There’s also some further creative ideas to be found online such as a GHG currency in a justice framework. These very lofty ideas can be superimposed with technology to make things a bit less institution centric (i.e. take out UNFCCC from Kyoto Protocol idea) – try the omnipresent idea blockchain for example, with some implementations have already been developed, such as ClimateCoin. It would be easy to go on with this, but the second part, making it a personal challenge, is a bit more tricky but involves knowing and promoting all the protocols, frameworks and technologies related to sustainability.

As a general “silver bullet” to utilize my opportunity is gradually incorporating a simple question when discussing plans at work or at home – “Why do we need it?”; the “it” being any goods, service or action. Putting things into perspective of cause and effect by answering “why” and linking it to a need, which can then be examined in the perspective of sustainability. See here about the importance of “why”.

Anything that contributes to goals and sustainability is needed and therefore contributes to happiness as Smith stated, whereas everything else doesn’t – providing the basic three necessities are taken care of – health, being debt-free and of clear conscience. All three I’d take in a broader sense then just their literal meanings – good health isn’t only physical, but also psychological/emotional – involving family, friends, exposure to new cultures and ways of thinking… but even maintaining relationships and traveling can be done having in mind basic principles of sustainability.

How to bring about this change?

In his book, Russ Roberts highlights an interesting thought: “When you can trust the people you deal with – when you don’t have to fear that your trust will be exploited for someone else’s gain – life is lovelier and economic life is much easier. How does trust get created? By the myriad of small interactions we have with each other when we honour our word and pass up the chance for opportunism.” Trust is also one of the key deficits we have in many organisations, and possibly, in nations. In fact, on a daily basis, we have more than 20,000 interactions (words we speak, our body language, our facial expressions etc.) with people around us. These 20,000 moments define our leadership, influence and levels of trust in us.

Smith seems to have figured this out almost 250 years ago.

For those who want to know more and have an hour of free time, here’s a great video interview with Russ Roberts:

Just as it’s difficult to measure if a society is moving nearer of farther from sustainability, judging whether I am succeeding in being a leader through this opportunity will not be a straightforward exercise, and can only become apparent after a longer period of time. What gives me assurance on this path is the example of successfully introducing the paradigm of monetizing energy efficiency savings as a better communicational tool for communicating benefits of optimizing energy performance. Money speaks louder than kWh of electricity or imperial gallons of water saved – an idea now widely used within the UAE government, which I like to think originated from the small team I’m a member of. Perhaps starting to ask “why” in the right way and in the right moment in daily interactions can start to bring about positive change as well?

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