Sunday, May 29, 2011

A Sad Case

‘Steve M’ writes (or rants on) (28 May) the 'No more Mr Nice Guy Blog’ HERE


‘At best, Ryan and the Ryanettes believe that Ryancare will provide satisfactory coverage of seniors' health care needs, at an appropriate cost to both government and seniors themselves, because the omniscient, omnipotent Invisible Hand will provide -- it is God, therefore it must provide. It is good and beneficent; it can do no wrong.

… Either way, the Republicans will never negotiate in good faith. You can't show them numbers demonstrating that their assumptions are wrong, because their numbers can't be wrong -- the God of the Free Market would not forsake her people. Either that or the God of the Free Market would not forsake anyone who did not deserve to be forsaken. They don't negotiate from our reality -- the one we think of as everyone's common reality. They're completely faith-based

This not a typical reference to the so-called ‘invisible hand of the market’ (there is no such thing – markets are very visible through the very visible prices that are necessary for them to work) but it is, however, as wrong as the other rubbish posing as an economic theory, usually ascribed erroneously to Adam Smith, of which the internet is overfull of others who make similar assertions across numerous fields.

I would not normally refer to specific items – most of the daily output on such lines, I delete as not worth a blog post – and of the example above I have no idea to whom ‘Steve M’ refers as “Ryan’. The ‘ideology’/ ‘theology’ angle is new, but I suspect ‘Steve M’ of the rant is using the distinction to make an ideological case against what he calls Ryan’s ideology and which he believes in as adamantly, not to say, ‘theologically’, himself about as rigidly as Ryan believes in his ideology.

Merchants and manufacturers in Smith’s day were not known widely as supporters of free enterprise and markets, any more than their successors to day. Consumers are not in favour of tariffs to keep them away from cheaper products; it’s the merchants and manufacturers of both times who lobby for tariffs, prohibitions, and, yes, barriers of higher costs in foreign wages, to disqualify foreign products from domestic markets, which are anything but free.

Look at any ‘trade association’ that funds lobbyists and count the demands they make on governments and their agencies that all businesses in their trade of interest be of minimum size and minimal regulation standards to be legal and eligible for government contracts, and that they comply with certain expensive requirements to remain in business at all. Only the really big firms can bid effectively for big contracts. I am familiar with this situation in the UK and I have no reason to suppose it is any different in the USA (I suspect it is even worse in the capitalist country with the largest government spend in the world).

So, ‘Steve M’ and ‘Ryan” fight a phoney war, using the common misperception of the ‘invisible hand’ – ‘Steve M’ believes his own propaganda and ‘Ryan’ spouts the myth that there is such an entity. Neither has actually read Adam Smith. Both traduce Adam Smith’s work. Sad.

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