Friday, May 10, 2013

Day 308: Foolishly Trusting 'The Invisible Hand's' Benevolence

English: Adam Smith statue in Edinburgh's High...
English: Adam Smith statue in Edinburgh's High Street with St. Giles High Kirk behind. (Photo credit: Wikipedia)

One of my students had to prepare an Essay on Adam Smith for his history teacher and sent me a copy.
It was quite interesting to see how we have twisted what was clearly stated by Smith to justify what came to replace 'The Invisible hand' concept as 'Market Liberalism'.

If one is not careful it's possible to miss the ironic slant of Smith in the 'Theory of the Invisible Hand' and yet we should not have, given that Smith was not Greek and did not live at the time of Epicurus but a few centuries afterward and for sure did not believe in Zeus and his all-reaching powers.
Hence his comparison of the Invisible Hand to Zeus unexpected antics, was meant as a source of derision for those that, holding all the goodies, tried to explain WHY it was Best this way and How it did really work out for the Common Good 'after all'.
Recognizing the inherent selfish and self interested human nature, as Adam Smith did, it's hard to prove beyond any reasonable doubt that actions that are motivated by such drives will certainly lead to the Common Good as if 'by chance' or as if 'someone had been moved by an invisible hand' to do 'Good'.

Since Smith ends one of his paragraph in his On the Wealth of Nations by stating that to him it was unknown that a merchant (now replaced by Bankers, Corporations, Cartels, Fund Managers, Traders etc) would deliberately act for the Common Good and that if and when any of their action incidentally happened to benefit someone else, we had to remember and be very clear about the fact that it was purely accidental, 'The Invisible Hand' was intended as something we could not trust or count on because the 'positive outflows' of the negative self interested starting point was simply not measurable or predictable.

What if private vice doesn’t produce public virtue at all, as Adam Smith surmised, but rather invites a heedless and reckless pursuit of private profit that leads inexorably to public catastrophe? Ted Frier

From ideas like 'The Invisible hand' as a source of Common Good to Market Liberalism and a lasseiz-faire Economy the step was short, in fact there was t even the need for a step, just a change of costumes and meaning to the words of Smith, whom on the contrary insisted that the Common Good should be the driving principle of all Economics, as the rich sought every little excuse to justify why wealth should not be regulated even when it clearly derives by the collective efforts of all. 

What is a factory without its workers, or, at large, a world of people who do not contribute any practical work that benefits the Whole but just move around paper (now digital) numbers congratulating each other for their Law condoned robberies, why is their contribution even rewarded at all since they are just the Puppeteers of a World that is asleep? Who came up with the trickle down theory, honestly, a laughable example of how not only the public is demanded to accept the crappy explanations regarding Inequality and plain Injustice but to believe that by lying low under the table where a banquet is being consumed by a bunch of greedy people, some crumbs, by no will of their own, may trickle down, there may be -or not?- a benefit to those that patiently wait for the leftovers of an irrational over consumption at the expense of those who don't even have enough to eat.

More recent Economics makes a virtue of self regard: it prides itself on being counter intuitive. Concern for others is soft minded ‘cheap talk’. It may be an ethical injunction, but that is only a‘value’. 
Those who want to understand the world are told to separate ‘ought’ from ‘is’. 
Modern social science prides itself on ‘Value Freedom’. Scientists describe things as they are, not as they ought to be. 
But the tough-minded economist who has no time for ethics is also making an ethical stand. 
The Pareto-efficiency criterion has nothing to say about prior distribution,which it takes as given. 
 is silent about equity. That is an ethical position, which relies on the counter-intuitive assumption that well-being is entirely subjective and cannot be compared from one person to another.  Avner Offer

and therefore 
Given the structural deficiencies of the free market and the perverse, self-destructive incentives it creates, it was probably smart for conservatives to shift the focus of their cheerleading away from capitalism’s economic performance and towards laissez faire’s imagined moral underpinnings instead — freedom, liberty, individualism and all of that. That’s because, as an economic incentive that promises broad-based prosperity, greed, it turns out, has not been so good. Ted Frier 

There is no way that a laissez-faire economy can benefit the billions who are in need, there are not enough crumbles on the table to wait for and hence  a New form of Government has to be set in place to tackle those problems, the Common Good cannot be left to be attended to by those who might by chance and no will of their own end up doing it as a collateral, unforeseen side effect of their plans, as Adam Smith implied, but it must be the driving principle we abide to, where all are considered Equally Valuable and the Freedom we seek won't be allowed any longer to come at the expense of those who don't have the Money to buy it for themselves.

Equal Money, Freedom for All within Self Responsible Human Beings is possible. Cast your Vote!

Enhanced by Zemanta

No comments:

Post a Comment