Adam Smith and Georg Wilhelm Friedrich Hegel concerned themselves on the principle that members of a society have an equal status as human beings, with basic rights and dignity. For Smith, the decisive contrast between a commercial society and a feudal society is that in the former, everyone has equal rights, and an equal opportunity to participate in the economic and social life of his or her country; in a similar way, Hegel sees equality before the law as the crucial achievement of modernity, for which he saw the French Revolution as breakthrough.
Both do not give us formulae for how much inequality is compatible with the equal standing of citizens. Roughly, Smith thinks that free markets lead to greater equality because they lift the working poor to a comfortable standard of living and they erode the inequalities of the feudal age, and that’s one of the reasons why he endorses them. Hegel, in contrast, thinks that free markets lead to increasing inequality; in fact, he predicts the development of a “rabble” of poor who cannot lift themselves out of poverty any more.
Smith developed his model of commercial society as a form of oligarchy, in which a small class of privileged individuals holds disproportionate wealth and disproportionate power, which helps them to cement their position. Smith was too optimistic with his assumption that in a commercial society vast fortunes would be eroded over time. The markets we have today are vastly different animals than the markets Smith wrote about, especially when it comes to the role of corporations, or when you consider the network effects that you have in many modern technologies.
The problem today is that markets are far less open for new entrants than the rhetoric of “free markets” suggests. The mechanism Smith was interested in is much more a question of giving individuals an opportunity to “work their way up”. With new, high-demand jobs, individuals could acquire a small fortune and hence economic security, which would give them “tranquillity of the mind”. This translates into a question over which institutional settings are required to make sure that every individual can earn a decent standard of living, and have sufficient economic security – so that people can turn to those things in life that really matter. For Smith, these are not economic things, but things such as love and friendship, and time to enjoy literature or music.
Both Smith and Hegel agreed on a basic fact about human nature, one in which we are influenced by our social contexts that are developed by underlying natural (metaphysical) processes. Even if we disagree with Smith and Hegel, consider the following questions: how can we shape our social contexts in ways that allow us to become, and remain, moral agents? Which co-responsibilities do we have for these phenomena, which, by definition, transcend the scope of action of single individuals?