Wednesday, March 22, 2006

Invisible Hand no 31

From Frontpagemag.com (Los Angeles, California, USA) Jamie Glazow interviews Dirk Herman: (Africa’s ‘Equality’):

Herman: Solidarity is the largest independent trade union in South Africa. It is organized in practically all the sectors of the South African economy. Solidarity operates in the Christian trade union tradition, is strongly focused on values, less government and the free market. It believes, however, that the market is only free if all role players are in balance. Adam Smith calls this “an invisible hand”. If government gains too much power, it becomes a government economy and is no longer free. If society becomes too powerful, it is a social economy and the market is no longer free, but if the shareholder gets too much power the economy is not free either. It then becomes a shareholders’ economy. The challenge is to find a balance that will bring a sustainable growth economy.”

Comment:

Hardly worth responding to:


Adam Smith did not call anything an invisible hand. He used it as a lonely metaphor to explain how individual decisions could have unintended consequences – in his example for the good of the national economy. From this passing use of Shakespeare’s metaphor (MacBeth: 3: 2)
It has been misappropriated by commentators today to be a ‘theory of the market’ (it wasn’t) and to claim it is 'law' that all self-interested actions by idnividuals wrok for the benefit of the community - some do but others don't.

Dirk Herman is the deputy general secretary of the Solidarity labor union in South Africa. He just finished a book, The Emperor Has No Clothes – Perspectives on Affirmative Action in South Africa, about affirmative action in South Africa, as well his Ph.D., Affirmative Action and Alienation – Guidelines for Employers, on the same topic.

Read the interview at:
(
http://www.frontpagemag.com/Articles/ReadArticle.asp?ID=21746)

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