Celebration of Scholars
The Gospel According to the Invisible Hand: Adam Smith and the 2008 Wall Street Crash
Name:
Bradley Morelli
Major: Political Science, Great Ideas, and English Literature
Hometown: Kenosha
Faculty Sponsor: Arthur Cyr
Other Sponsors:
Type of research: Course project
Abstract
The Gospel According to the Invisible Hand: Adam Smith and the 2008 Wall Street Crash
The equality of opportunity is a profound American ideal upheld by a strict emphasis on the rule of law. Many scholars feel that the growing wealth gap is the most significant problem of the 21st century and a direct result of lax enforcement of financial regulations. A major point of emphasis is on the difficulty of enforcing a rapid and robust change to the law because of the structure of the American government. This research, which focuses on the Wall Street Crash of 2008 through a close reading of Adam Smith's Wealth of Nations, seeks to answer the question of how Smith would react to the financial crisis and construct the economy in its aftermath. Specifically, Smith's economic concept of the "invisible hand" is explored because it is often used to argue that free markets, made up of economic agents who act in their own self-interest, deliver the best possible social and economic outcomes. This project uses not only Adam Smith's economic analysis, but offers a general survey of the Great Depression, a synopsis of banking regulation from Woodrow Wilson to Barack Obama, and presents various excerpts from The Federalist Papers to argue that the traditional use of Smith's concepts may not necessarily be faithful representations.