"One of the most dangerous ideas at large in the current culture is that the "free market" is the ultimate arbiter of political decisions, and that there is an "invisible hand" that will direct us to the most desirable future provided the free market is allowed to actualize itself. This mystical faith is based on some reasonable empirical foundations, but when embraced as a final solution to the ills of humankind, it risks destroying both the material resources, and the cultural achievements that our species has so painstakingly developed".
2006:What is Your Dangerous Idea? The Free Market.
4 comments:
The "musical chairs" narrative of Chuck Prince illustrates this. The Wall Street honchos knew that it was a Ponzi that had to blow up but as long as it went on, they felt that they had to play to stay competitive. Regulation prevents destructive behavior, including self-destructive behavior.
It is like putting boundaries on children and teens. They may complain but they actually like boundaries they realize will keep them safe, even though they whine about them.
Tom,
I think it was Adam Smith that first came up with 'the invisible hand'.
I think he may have just been referring to the concept of a consuming individual seeking what they perceive as best value for themselves and making purchasing decisions based on this. That process can be looked at as sending a feedback to the marketplace on what consumers generally want or value, that's it. and then Smith just calls it 'invisible hand' that in effect 'guides' the production of things/products... as opposed to a top down production policy driven by govt type thing.... this I can understand.
Smith probably didnt mean that everything can just "run itself" in other words chaos and anarchy like the proponents of this term interpret it today.
seems like we have another situation that requires nuanced thinking and many are not up to it, and they over simplify things as usual. Resp,
Adam Smith uses "invisible hand" once in The Wealth of Nations in relation to trade. The contemporary "invisible hand" dogma is a neoliberal construct that seeks to ground itself in the supposed authority of Adam Smith. But to claim that Smith held the same dogma is a stretch.
My contention is that Smith's notion of the invisible hand likely derives from 18th century Deism, of which he was a proponent, but Smith scholar Gavin Kelly tells me that there is no evidence for this.
Oops. Make that Gavin Kennedy instead of Kelly.
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