It's an intriguing hypothetical scenario to consider how the development of economic theory, particularly by Adam Smith in 1776, might have shaped our world differently. If Smith had proposed a theory of a "perfect red market" emphasizing environmental sustainability and social responsibility from the outset, it could have indeed influenced economic and industrial practices over the following centuries.

In this alternate reality, if societies had adopted principles of environmental stewardship and social equity as foundational to their economic systems since the 18th century, it's plausible to think that certain environmental problems may have been mitigated or avoided altogether by the time of the World Commission on Environment and Development (WCED) in 1987.

A perfect red market, prioritizing sustainability and social welfare, might have encouraged practices such as renewable resource management, pollution prevention, and equitable distribution of resources and wealth. This could have led to a more balanced relationship between human activity and the natural environment, potentially averting some of the environmental crises that emerged in our timeline.

However, it's also important to recognize that any economic system, even one designed with sustainability and social welfare in mind, would still face challenges and complexities. The rapid industrialization and technological advancement that occurred over those centuries might still have exerted pressures on the environment, albeit perhaps to a lesser extent. Additionally, the global interconnectedness of economies and the geopolitical dynamics of resource distribution would have presented ongoing challenges for maintaining sustainability and equity.

In essence, while a perfect red market model from the 18th century might have contributed to a more environmentally sustainable and socially equitable world by the late 20th century, it likely would not have completely eradicated all environmental problems. However, it could have laid a stronger foundation for addressing those challenges in a more proactive and holistic manner.

Federico, excellent comment if you look at it as if Adam Smith would have given us the perfect sustainability market instead of the perfect traditional market....as the perfect sustainability market is socially and environmentally friendly as said.... BUT this question is about perfect red markets.

I asked the question this way on purpose as I know there is confusion about all these different types of perfect markets specially for those accostumed to think only in terms of traditional market thinking.

See below 4 different types of perfect market thinking, which could be arrange from the most irresponsible one to the most responsible one:

Perfect red market/socially friendly capitalism

Perfect green market/envirormentally friendly capitalism

Perfect sustainability market/socio-environmentally friendly capitalism

Perfect traditional market/socio-environmentally unfriendly capitalism

Federico, you may find the following paper interesting:

Did Adam Smith Miss the Chance to State the Goal and Structure of Sustainability Markets in His Time? If Yes, Which Could Be Some of the Possible Reasons Behind That?

Article Did Adam Smith Miss the Chance to State the Goal and Structu...

Juan Domingo Perón, in addition to being the creator of a national movement unique in the world, was also a prolific writer. In his works, he addressed strategic issues for Argentina, including environmental sustainability and social responsibility.

In 1972, from his exile in Puerta de Hierro, Spain, Perón published a message in which he questioned the suicidal march of humanity due to environmental pollution, the squandering of natural resources and the unchecked growth of the population. In this message, he emphasized the need to reverse the direction of this march through joint international action1.

Furthermore, during his third presidency, Perón approved the Three-Year Plan, which included environmental problems as one of the central problems. He created the Secretariat of Human Environment and Natural Resources, the first state environmental agency in Latin America and one of the few existing in the world at that time. This ministry implemented an innovative environmental policy during the brief period between September 1973 and the aftermath of his death in July 1974.

Perón stressed the need to have “new models of production, consumption, organization and technological development” that would prioritize the satisfaction of essential human needs, ration the consumption of natural resources and minimize environmental pollution. His environmentalist vision remains relevant today, especially in the context of the COP26 Earth Summit in Glasgow.

Thank you Federico for taking the time to write and for sharing the thoughts of Peron

The WCED 1987 concluded basically the same things as it called for IMPLEMENTING a new model away from traditional market thinking/away from business as done before as traditional markets are in fact POLLUTION PRODUCTION MARKETS and the cause of the problem and we need to go beyond them, but the WCED 1987 MIXED UP, on purpose or not, a socio-environmental sustainability problem they documented for a sustainable development problem, leading us to start solving the socio-environmental sustainability problems with the wrong foot as sustainable development solutions are not aimed at fixing the driver of unsustainability embedded in the traditional market which made it socially and environmentally unfriendly, but aimed at managing or minimizing pollution problems associated with market activity.

This question can be seen from the point of view of red markets and Adam Smith, but also from the point of view of green markets and Adam Smith or Sustainability markets and Adam Smith, and have some parallel thinking in terms of answers.

Have you see the following publications Federico, you may find them full of new food for thoughts related to this question from the sustainability point of view

:

Sustainability thoughts 192: What are the sustainability consequences of assuming that flawed paradigms are golden paradigms? The case of the perfect traditional market.

Article Sustainability thoughts 192: What are the sustainability con...

Sustainability thoughts 194: How can we show that the sustainable development solutions to the socio-environmental sustainability problem created by traditional market thinking by 1987 are both partial and without clear priority solutions?

Article Sustainability thoughts 194: How can we show that the sustai...