LOONY TUNES no 173
TImothy Boyle post (19 September) in The Age HERE
“Top Clubs Find Inner Champion
“Hawthorn, Sydney and Geelong have generated a kind of microcosmic alternative to the social principle of Adam Smith's "invisible hand", in which he argued the whole of society would benefit if individuals focused on their own success. The "invisible hand" in football is a social atmosphere, a program of shared behaviours and attitudes enforced by teammates in order to lift individuals into their best form.”
unagidon, a contributing editor to Commonweal posts (10 September) in Commonweal
“The idea that poor management should inevitably lead to poor performance is based at least in part on things like Adam Smith's theology of the "Invisible Hand". Poor management should lead to increases in price and should lead to a decrease in the quality of the product. Sooner or later, competitors will emerge that will be more efficient both in cost and quality, and they will knock the inefficient company out of the market. The likelihood that this will happen represents a risk for the person running a business. This risk is what drives them to be efficient. Amen.
In fact, Smith's whole theory, insofar as this kind of risk is a driver of the whole thing, was already falling apart when he was alive and writing in the 18th century with the rise of the joint stock company (which today we simply refer to as the corporation). The creation of the corporation led to the separation of ownership from control. In the early days of the corporations, back before corporations became "persons", they were envisioned as a means to protect an individual from personal risk. With a corporation, only the corporation took on risk and only its assets were on the line in the case of a failure. It seems rather strange to look at now, because while it limited personal risk, it also transferred risk outside of itself by limiting the assets that an aggrieved debtor could obtain if the corporation collapsed. (One wonders if the Life of Trump would have been radically different with his bankruptcies if his personal assets had been available for investors to recover from).”
“Democracy is a hard sell to those who see only the two alternatives of despotism and chaos. It requires believing that beneficial politics and economy can be the result mostly of self-organization - a third alternative to strict control and total bedlam.
Maybe, though, this third way shouldn’t be so hard to believe. Many phenomena in the natural world work because of self-organization: from the formation of molecules, to the crystallization of each unique snowflake, to the “schooling” of fish, to the function of anthills. Complex wholes can be built on components, each operating simply and without central coordination. The whole can function as more than the sum of its parts. This principle appears to be quite prevalent across nature, according to the interdisciplinary field of complexity science. Among them are biologists, physicists, chemists, engineers, and social scientists, who see that interesting phenomena occur at that critical edge between order and chaos. Doesn’t that sound like where democracy operates?
Even if complexity science applies to politics, democracy is still a hard sell. To the many in the world with no concept of political order without direct central control, democracy’s bottom-up logic makes no sense. The claims of western democracy boosters seem as magical as the market’s “Invisible Hand” (Adam Smith) or the “Mystery of Capital” (Hernando de Soto). The real global debate today is over which model leads to better societies: the all-controlling despot or the self-organizing democracy. Both sides have much work to do in convincing the other.
Follow Morgan Y. Liu on Twitter: www.twitter.com/morganistan1
Subodh Vermal posts (22 September) in The Times of India HERE
“Experts have described these extreme rainfall events as the invisible hand of climate change revealing its dangerous impact”.