QUICK BITS, No. 13

Achievement Shitlavani posts (8 June) on Business Day Live (South Africa) HERE

“The Nats were not the free market’s friends”

“Adam Smith’s invisible hand is now becoming more visible as we witness the market becoming directly involved in social programmes such as community sponsorships, bursaries, skills development and other community social investment projects.”

Comment

Absurdly contrived reconstruction of a metaphor that had nothing to do with markets or social programmes; it was about the intentional motivated actions of individual merchant who considered investing abroad having risks and therefore invested in his home country. His intended consequence was the security of his investment. His action also had the unintended consequence of adding to domestic capital which benefitted society. That unintended consequence was beneficial because it benefitted the wider community for the public benefit. However, not all unintended consequences are beneficial for a community.

The latter cases, for example, include merchants who persuading governments to impose tariffs which reduce competition so that merchants can then raise prices, which consequence are never a public benefit.