Good Lines Do Not Smithian Insight Make
Time 12 Sep 2005 edition
“10 Questions for John Bogle, author of The Battle for the Soul of Capitalism, which is coming out this fall/Autumn (Yale University Press).
Interviewed by Barbara Kiviat, 4 September 2005. In the course of the interview, which was basically on: “WHAT'S SO WRONG WITH CAPITALISM TODAY?”, Mr Bogle opined:
I got a group of fund managers together to talk about these issues, and one of the guys said, "Wait a minute, Jack. I understand what you're saying, but these things come and go. Why don't we just let Adam Smith's invisible hand take care of it?" I looked at him and said, "For God's sake, don't you know that we are Adam Smith's invisible hand?"
Now, regular readers should know I won’t let such statements go, not even from multi-millionaire successes like Jack Bogle. He knows a lot about making capitalism work (a system of political economy not known to Adam Smith – it took root in the middle of the next century after he died in 1790), but he confuses Smith’s selective use of Shakespeare’s metaphor (Macbeth, 3.2) with Smith's analysis of markets, which revealed them to be simple, not invisibly complex, nor run by supernatural forces along the lines of biblical miracles.
It’s a good line though: ‘we are the invisible hand’! Whatever he meant by that it had nothing to do with how a market works. See my earlier Blog today on Shakespeare’s invisible hand.
“10 Questions for John Bogle, author of The Battle for the Soul of Capitalism, which is coming out this fall/Autumn (Yale University Press).
Interviewed by Barbara Kiviat, 4 September 2005. In the course of the interview, which was basically on: “WHAT'S SO WRONG WITH CAPITALISM TODAY?”, Mr Bogle opined:
I got a group of fund managers together to talk about these issues, and one of the guys said, "Wait a minute, Jack. I understand what you're saying, but these things come and go. Why don't we just let Adam Smith's invisible hand take care of it?" I looked at him and said, "For God's sake, don't you know that we are Adam Smith's invisible hand?"
Now, regular readers should know I won’t let such statements go, not even from multi-millionaire successes like Jack Bogle. He knows a lot about making capitalism work (a system of political economy not known to Adam Smith – it took root in the middle of the next century after he died in 1790), but he confuses Smith’s selective use of Shakespeare’s metaphor (Macbeth, 3.2) with Smith's analysis of markets, which revealed them to be simple, not invisibly complex, nor run by supernatural forces along the lines of biblical miracles.
It’s a good line though: ‘we are the invisible hand’! Whatever he meant by that it had nothing to do with how a market works. See my earlier Blog today on Shakespeare’s invisible hand.
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