Adam Smith’s theory of the invisible hand states that for each product or service there is an interplay among the forces of supply and demand, competition, and self-interest. Smith, an eighteenth-century Scottish economist and philosopher, is generally regarded as the father of classical economics. Baptized into the Church of Scotland, he was an Enlightenment-era scholar who thought about economics from the individual’s perspective.
Before the eighteenth century, the pedestrian theory of economics was mercantilism, which stressed the accumulation of national wealth by being a net exporter. When Smith wrote, there was a philosophical shift in focus from the community to the individual. The driver for this shift was metaphysical nominalism that emerged in the fourteenth century. Influenced by this thinking, Smith emphasized that wealth was produced by the labor of individuals. His theory of economics focused on individuals and, therefore, tended to be humanistic.
For Smith, economics included understanding productivity, such as the specialization and division of labor, but it also encompassed morality. Economics was the social science that governed work and the wealth produced by work. His Christian heritage informed him of the depravity of mankind; hence, economics must include self-regulation. In the eighteenth century, self-regulation was largely based on biblical guidance, particularly in the United States and Europe, given the influence on the culture by the Great Awakening.
According to Smith, the cumulative result of individual labor is the product of work. And for work to be meaningful, it must be both moral in nature and morally accomplished. The by-product of moral work is wealth.
The production of wealth, however, is not the end game. It is the means to an end. The goal for a Christian is to obey God. Biblically, all people are created by God to serve him, and, based on the Creation Mandate of Genesis 1:26–28, the chief duty of mankind is to steward God’s creation. Economics is a tool to help mankind function efficiently and effectively in obeying this mandate. Moral work is that which enables mankind to steward God’s creation. And wealth as the by-product enables mankind to grow his capacity to rule God’s creation.
Therefore, organizations are tools to enable mankind to obey the Creation Mandate by serving as God’s proxy in the stewardship of his creation. Biblically based economics provides the guidance for producing legitimate products or services according to biblical ethics in obedience to the Creation Mandate.
Here is your business tip. Organizational leaders must be committed to biblical economics and ethics. This is the proper foundation for building organizations in God’s creation. The motive must be to participate in the ruling of God’s creation in accordance with his will and ways. To do this well requires organizational cultures shaped by biblical norms. When organizations produce ethical products and services in an ethical way, God will be glorified and the organization will be profitable.
