Wednesday, January 14, 2009

Invisible Hand and Markets

John McMurtry, Professor Emeritus at University of Guelph, Canada, posts on Canadian Dimension (‘for people who want to change the world’) HERE:

The Obama Crossroads: Neo-Liberal Coup or Responsible Government”

“No Roots in Adam Smith or the New Deal”

“Adam Smith’s vision of the free market did not envisage exporting toxic wastes to the poor to save rich polluters from cleaning up their act. When the market’s “invisible hand” was briefly annunciated by Smith, he was clear that the free market was only in “tangible goods useful to mankind”. The neoliberal school invokes Smith, but simply erases the productive economy from its models where only money coordinates count.”

If you wish to ‘change the world’, first you must understand history, both of ideas and practice.

The ‘invisible hand’ was no part of Adam Smith’s “vision of the free market”.

In fact it wasn’t anything to do with markets.

Its sole use on the single occasion in Wealth Of Nations that he mentioned it as a metaphor was to do with ‘risk avoidance’, not markets (see Lost Legacy, passim, or ‘everywhere’).

I am not sure what the ‘neo-liberal school’ means, especially as American English seems to have different meanings for ‘liberal’ (is it left or right, or both?) and the addition of ‘neo’ to both Liberal and Conservative seems to be a term of abuse.



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