Wednesday, October 29, 2014

MEDIATING THE SELF-INTERESTS OF PEOPLE THROUGH BARGAINED EXCHANGES CAN RAISE MUTUAL WELFARE

Attorney Jonathan Emord, author of "The Rise of Tyranny" and
"Global Censorship of Health Information" and "Restore The Republic” posts (6 October) on NewsWithViews.com (“Where reality shatters illusion”
HERE http://www.newswithviews.com/Emord/jonathan363.htm
“THE ECONOMY'S TRUE CONDITION”
This historic death spiral for an over taxed and over regulated economy can be reversed before a collapse but it requires courageous leadership. At root, it requires an appreciation for Adam Smith’s moral and economic philosophy. “It is not from the benevolence of the butcher, the brewer, or the baker, that we can expect our dinner,” wrote Smith, “but from their regard to their own interest.
In short, economic welfare cannot be achieved through planned economies, whether under the mercantilist system that Adam Smith rejected in the 18th century or under the morass of regulations that erect politically preferred prior restraints under the administrative state of the 21st century. Smith’s “invisible hand” of the market offers the only solution that respects individual liberty and freedom of choice, recognizing that one’s pursuit of self interest in the market leads inevitably to the satisfaction of others’ needs and wants, enabling the economy overall to rise.
Comment
Yes, but Adam Smith on self-interest can only work as he shows, but it has since been forgotten (as shown in the above shortened quotation), by the mutual mediation of individual self-interests by persuasion and bargaining and “addressing the self-love of others”, and specifically in Smith's "butcher, brewer, baker" example (see WN, Book 1, chapter 2, paragraph 2) and also in TMS on ‘persuasion’, “good offices”,  and “exchange”.

It is by pursuing the self-interests of others in markets (NOT solely our own self interests!) that makes markets work. Markets work through VISIBLE prices to meet the “satisfaction of others’ needs" while in pursuit of our own.  Whether the  “economy overall” rises can only be judged on a case-by-case basis. Satisfying our own needs only could undermine basic freedoms and the welfare of others (pollution, trade tariffs and prohibitions, environmental destruction, and wars).

2 Comments:

Blogger Michael Webster said...

The invisible hand doesn't work without a clever auction device.

The different experiments run by Chamberlain and Smith show this decisively.

1:28 am  
Blogger Gavin Kennedy said...

Michael
I am not sure what you mean? The IH is a metaphor for an individual's motive for under taking an action with intended consequences. The action taken may also have unintended consequences, positive or negative.
What Chamberlain contributed to explaining the metaphor I cannot imagine.
Likewise the 'clever auction device".
Please explain.
Gavin

3:32 pm  

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