Adam Smith's "Invisible Hand" Question?

[neoteric lefty]

I am no economist, whatsoever (software engineer) but I remember reading somewhere arguing that the "invisible hand" that Adam Smith described wasn't so much the power of supply and demand but the corruption that follows from unregulated capitalism. Maybe this was from a critic of his, I am not sure. Anyone else heard this theory?

[NEOBuckeye]

1. Thom Hartmann mentioned something about it during his radio show.

I couldn't tell you exactly when, but I'm sure it was sometime last week. Maybe you could look it up on his website? http://www.thomhartmann.com/

[neoteric lefty]

2. it was on the web

maybe here at DU, maybe somewhere else. Not sure :(

[einniv]

3. You may be able to find stuff about Adam Smith at this site:

http://www.parecon.org/

Participatory Economics (parecon for short) is a type of economy proposed as an alternative to contemporary capitalism.

The underlying values parecon seeks to implement are equity, solidarity, diversity, and participatory self management.

The main institutions to attain these ends are workers and consumers councils utilizing self management decision making methods, balanced job complexes, remuneration according to effort and sacrifice, and participatory planning.

The parecon vision is spelled out in numerous books, the latest of which is Michael Albert’s ParEcon: Life After Capitalism.

[BillZBubb]

4. The Invisible Hand was a good thing to Smith

It was the magic of the market. It helps goods find their correct price, and helps wants turn into products.

The invisible hand was preferable (for Smith) to the hand of government in trying to control or influence the market.

I'm sure you are remembering a critic of Smith.

[maggrwaggr]

5. right now the "invisible hand" is shoved up our collective asshole

The "invisible hand" only works where there is FREE COMPETITION.

It does NOT work in cases where there is monopoly, ogilopoly, or corporations controlling the government to the point where they discourage competition.

Which is what we have now, and ever more of it.

Next time a republican talks about Adam Smith, ask him why they don't promote competition in the marketplace.

[Kinkistyle]

6. Aye. Smiths theories based on "perfect competition"

Its taught that way in every Economics class I'ver taken.

[rman]

12. perfect competition seems to eliminate competition by causing monopolies

as it is now only regulation prevents total monopoly, and there still are big monopolies in spite of regulation.

[Gadave]

10. Free competition is only possible with small business

I wish people would realize that free market only works when there is actually a market.

As an example, consider a flea market and a baseball game.

At the flea market you have 500 merchents all competing on price for everything. Supply and demand gets a chance to stretch its legs.

Now consider the baseball game. One vendor sells everything, and you get 5 dollar hotdogs, which cost 25 cents to make including labor. This is the US today.

The Republicans are to blame for a lot of this, but I think the Democrats (read Republican lights) we elect are equally to blame. Over regulation strangles small business. Big business loves over regulation because it raises the barrier to entry to a point where they have little competition.

The first step to reclaiming our country back from big corporations is to release the small busines owner from the regulations which makes no one not want to own a small business.

[David Zephyr]

7. The Reason The Invisible Hand Is Called the Invisible Hand...

is because it doesn't exist.

There is no Holy Spirit in economics.

[muriel_volestrangler]

8. Direct quote

"But the annual revenue of every society is always precisely equal to the exchangeable value of the whole annual produce of its industry, or rather is precisely the same thing with that exchangeable value. As every individual, therefore, endeavours as much as he can, both to employ his capital in the support of domestic industry, and so to direct that industry that its produce maybe of the greatest value; every individual necessarily labours to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security ; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain; and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest, he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it."

or: what's good for Americans is good for America.

Another quote that may throw light on Smith's outlook:
"People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. It is impossible, indeed, to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies, much less to render them necessary."

Searchable online book at: http://www.online-literature.com/adam_smith/wealth_nations/

[sweetheart]

9. Economic complexity

Adam smith's work is from a time period where global multilateral
trade was more a principal than a reality. The invisible hand could
just as well NIMBY'ism (Not In My Back Yard). As when people are
empowered over their own econmics pursuing free will, as ALL of the
folks on DU expect as rights... to claim Adam smith is an ass is
going a bit far. http://www.adamsmith.org/

I think he had a strong point in the wealth of nations that
government should not interfere with the affairs of people except in
cases of strife and unfair competition. This latter remark, does
indeed suggest that he had a lightweight regulatory thinking, that
simply cannot transcend 200 years of economic development.

Milton Friedman is a more recent economist to blast, for suggesting
the more straussian lines of thinking, and forming the Theoretical
basis for the republican raid on the public trust.

As a software engineer, conceive of a multithreaded server with 300
million intelligent objects, all of which use swarming behaviours
that whilst appearing independent, they flock in economic tribes.
(companies). Clearly without the overhead of the server and its
arbitration of stack prioities, there is no operational software.
The invisible hand is one object talking about that mysterious
server and all the services it provides unbeknownst to the object.
No serious economist or software engineer would claim that the
individual is what powers the whole thing, yet just as well, the
server/government just as well is an empty thing without
individuals.

Given 1776, and the economics of the time, "invisible hand" is
eloquent prose.

[Solomon]

11. The "invisible hand" is not

invisible anymore.