Wednesday, May 23, 2007

Libertarians: Please Note Adam Smith's Qualifications on Perfect Liberty

Frank James in The Chicago Tribune (The Swamp CT’s Washington Bureau) comments on Philippe Legrain on the US immigration Bill before the Senate:

“While it's a system that's being used by other nation's, as Legrain points out, it does seem odd that conservatives of all people would be advocating such an approach since it seems to get in the way of Adam Smith's invisible hand.”

Legrain gets specific:

“But bureaucrats cannot possibly second-guess the requirements of millions of United States businesses, let alone how the fast-changing economy’s employment needs will evolve over time. In effect, the points system amounts to government officials picking winners—a notion that conservatives rightly criticize in industrial policy and elsewhere. Hayek must be turning in his grave.”

How true, but what’s it got to do with Adam Smith’s metaphor? Smith believed in perfect liberty under justice, namely that each individual should be able to use his capital (which included human capital) in what he regarded as his best interest, without interference, restrictions and prohibitions imposed by the State (a breach of natural justice) or other individuals (merchants, manufacturers and monopolists), provided his self-interested actions did not harm others, were not unfair, and would be approved by the impartial spectator. [Libertarians: Please note the Smith’s qualifications.]

None of this has anything to do with the famous metaphor of an invisible hand. Indeed, the specified qualifications, especially the impartial spectator, preclude, make redundant, and exclude ant role whatsoever for ‘an invisible hand’. So why use it?


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